The company branded itself as private equity for Main Street, pulling in close to $2 billion largely from everyday Americans hoping to pad their retirement savings, even as prosecutors later said its leaders were siphoning off the money to bankroll extravagant personal lifestyles.
So when President Trump last month released David Gentile, the convicted fraudster who led the firm GPB Capital, just days into a seven-year prison sentence, it landed as yet another gut punch for the thousands of investors still struggling to recover their losses.
The commutation of Mr. Gentile’s sentence effectively wiped away years of work by Brooklyn prosecutors who had laid bare a scheme that cheated thousands of people, many of them older Americans living on fixed incomes. For victims and others tied to the case, it immediately raised fresh questions about why Mr. Gentile was granted mercy and what that decision meant for those he left financially damaged.
“I’m a senior citizen,” said Catherine Kominos, 66, a retired engineer in Virginia who said she put $50,000 into GPB. “I need that money. It’s not like I’m a jet setter or a wealthy person.”
Mr. Gentile, 59, was convicted in August 2024 on securities fraud and wire fraud charges after a jury deliberated for just four hours. He reported to prison on Nov. 14 and was freed 12 days later following Mr. Trump’s commutation.
The decision stands out as one of the more baffling examples of how Mr. Trump has brushed aside the Justice Department’s long-standing process and guidelines for identifying clemency candidates who have served substantial time, shown remorse or are unlikely to reoffend. There are no limits on a president’s authority to issue pardons, which erase convictions entirely, or commutations, which simply cut sentences short.
Mr. Trump has repeatedly used that authority to reward allies — many convicted of white-collar crimes — and to make political statements, often portraying prosecutions of his supporters as witch hunts similar to those he claims were aimed at him.
In Mr. Gentile’s case, it was not immediately clear whether he had any ties to Mr. Trump or people close to him, nor who had advocated for the commutation. An attorney for Mr. Gentile declined to comment. Karoline Leavitt, the White House press secretary, told reporters this month that Mr. Gentile’s conviction was a “weaponization of justice” carried out by the Biden administration.
There is no evidence, however, that any aspect of Mr. Gentile’s prosecution was politically driven. The Justice Department opened its investigation during Mr. Trump’s presidency in 2019, and the judge who later oversaw the case, Rachel Kovner, was appointed by Mr. Trump.
One of Mr. Gentile’s GPB partners, Jeffry Schneider — convicted alongside him and sentenced to six years in federal prison — does not appear to have received clemency. Another partner, Jeffrey Lash, pleaded guilty to wire fraud, testified against Mr. Gentile and Mr. Schneider, and was sentenced in September to time served.
The three men founded GPB Capital in 2012, pitching investors on a strategy that promised to buy profitable companies — mainly car dealerships — and use the revenue to pay monthly distributions equal to 8 percent of the original investment, with the possibility of even higher returns.
In reality, prosecutors in the Eastern District of New York said at trial, the businesses Mr. Gentile and his partners acquired were not generating enough income to support those payouts. Beginning in 2015, the firm started using money from new investors to cover distributions, a hallmark tactic of Ponzi schemes.
Among the companies GPB acquired were several owned by members of the Church of Scientology, which Mr. Gentile belonged to, according to three people familiar with the firm and the case. As GPB expanded, Mr. Gentile — a donor to Scientology — promoted the faith within the company, according to four people with knowledge of GPB who requested anonymity to discuss law enforcement matters.
Scientology, founded by science fiction writer L. Ron Hubbard, who died in 1986, is built around the idea that members who invest time and money will eventually gain enlightenment. The church has long faced allegations from former members that it fosters abuse and targets critics, accusations it has denied.
While the connections between Mr. Gentile, GPB and Scientology were not raised in court, investigators questioned witnesses about them before trial, according to three people familiar with the investigation who were not authorized to speak publicly. Although some prominent Scientologists support Mr. Trump, it remains unclear whether Mr. Gentile does.
“There was absolutely no involvement whatsoever from the church in the commutation,” said David Bloomberg, a spokesman for the Church of Scientology.
Warning signs for investors emerged when GPB’s monthly distributions were reduced to quarterly payments, said Lou DeLuca, 76, a retired Brooklyn schoolteacher who invested $100,000 with his wife. In 2018, the payments stopped entirely. “Over all that time, our investments are growing,” Mr. DeLuca said. “But not this one.”
By the time the F.B.I. raided the office of a waste management company controlled by GPB in 2019, state and federal regulators had already been scrutinizing the firm for years. After Mr. Gentile was charged, he stepped down from GPB’s board.
In motions seeking to dismiss the case, Mr. Gentile’s lawyers argued that investors had been told their funds could be used to support distributions and accused prosecutors of misconduct. Judge Kovner rejected those arguments in March, even as the White House echoed the same claims in defending the commutation. Under the commutation’s terms, Mr. Gentile may no longer be required to pay the $15 million in forfeiture sought by federal prosecutors.
After criminal charges were filed, GPB’s remaining assets were placed under a court-appointed receiver. About $400 million from liquidated holdings has since been distributed to investors through a civil claims process separate from the criminal case, according to court records. More than $700 million is still owed, after years of legal battles in which Mr. Gentile challenged aspects of the repayment plan.
In a bitter twist, money earmarked for investors has also been used to cover Mr. Gentile’s legal bills in extensive federal and state litigation. Court filings show that $62 million from the liquidated assets has gone to his attorneys. Before sentencing, Mr. Gentile’s lawyers portrayed him as someone who ultimately acted in investors’ best interests, a claim prosecutors and many victims strongly disputed.
Joseph Peiffer, a lawyer representing some of the plaintiffs seeking repayment, compared the case to that of Bernie Madoff, who ran one of the largest Ponzi schemes in history. Most of Mr. Madoff’s victims eventually recovered their money, Mr. Peiffer noted, and Mr. Madoff died in prison.
“At least there was some justice in those cases. That’s not something my people are going to get.” Jeff Lipman, a retired dentist in Boca Raton, Fla., said he invested $750,000 in GPB. He has recovered hundreds of thousands of dollars through a federal settlement but says nearly $300,000 is still owed.
Mr. Lipman, 72, said he cannot understand why Mr. Trump — whom he supported — would intervene on Mr. Gentile’s behalf, and rejected any suggestion that the case was politically motivated. “I’m a Trump supporter, and this was bad, bad, bad,” Mr. Lipman said. “To have this guy finally go to jail deservedly and for Trump let him out, there can be no excuse for this.”
