Two businesses are suing to seize control of a Tuckahoe apartment building from a former Putnam Valley penny stock manipulator who owes them $18 million.
Avalon Holdings Corp. of Warren, Ohio and New Concept Energy Inc., of Dallas, sued Guy Gentile and Xgen Properties LLC, March 6 in Westchester Supreme Court.
“Guy Gentile has made no attempt to pay any part of his indebtedness,” the complaint states, “and has in fact done everything in his power to evade his obligations.”
Avalon Holdings owns the Grand Resort hotel and country club and a waste management business in Ohio. New Concept operates oil and gas properties. Both are publicly-traded on stock exchanges.
The object of their lawsuit is The Avenue at Cresswood, 300 Columbus Ave., Tuckahoe, a three-story structure with apartments and ground floor shops across the street from the Cresswood train station. Xgen Properties, Mount Vernon, bought the building in 2021 for $15.5 million, according to the deed, and Gentile allegedly owns Xgen.
A federal judge in Manhattan awarded Avalon and New Concept more than $8 million each in 2024, in lawsuits they brought against Gentile and his Mintbroker International Ltd. for engaging in pump-and-dump stock schemes.
In a pump-and-dump, a fraudster buys lot of stock in a company and then spreads false information to create a buying frenzy. When the price peaks, the dumpster dumps his shares and makes a quick profit. When he stops hyping the stock, the price falls and other investors lose money.
Gentile is “a connoisseur of scams,” Avalon alleged in its 2018 federal lawsuit. The FBI detained him at Westchester County Airport on his arrival from the Bahamas in 2012, for instance, in connection to pump-and-dump schemes involving a gold mining company and an oil exploration company.
To avoid arrest, he became a FBI informant for three years participated as an undercover operative in financial fraud cases. When he was no longer useful, Avalon claims, the U.S. Department of Justice offered him a plea deal with no prison time. He refused, and tried to use surreptitiously recorded conversations with FBI handlers to dissuade prosecution.
He was charged anyway with civil and criminal charges, but the cases were dismissed on statute of limitation grounds.
Avalon and New Concept accused Gentile of running pump-and-dump schemes against them in 2018, and concealing his ownership of their stocks.
The U.S. Securities and Exchange Commission requires anyone who attains 5% or more of a company’s stock to file disclosure reports. The SEC also does not allow anyone who owns more than 10% of a company’s shares to reap short-term profits by buying and selling within six months.
According to Avalon, Gentile bought about 60% of its class A common stock, quickly sold it and made a profit of more than $5 million.
The final judgment awarded against Gentile in 2024, with interest, now totals about $9 million each for Avalon and New Concept.
Gentile has exhausted all appeals, according to Avalon and New Concept. The problem is that he is hard to track down. He claims to live in Dubai in the United Arab Emirates, “while in fact surreptitiously establishing himself in luxurious accommodations in Italy.
So Avalon and New Concept are asking Westchester Supreme Court to turn over Gentile’s interest in Xgen to them, or to order the sheriff to sell The Avenue at Cresswood at a public auction and give them the proceeds.
Meanwhile, a federal magistrate judge in Manhattan has directed the U.S. Marshals Service to arrest Gentile if he appears in the U.S. He agreed with Avalon and New Concept “that Gentile feigned his willingness to cooperate yet strategized to evade compliance” with the $18 million judgement.
