As we previously reported, Scientologist David Gentile’s GPB Capital is under investigation by the SEC and FINRA for matters related to financial reporting and the sale of GPB Regulation D offerings through brokers. Since its inception in 2013, GPB Capital has raised $1.5 billion through its 60+ brokers. The brokers were paid over $100 million dollars in commissions thus incentivizing them to sell GPB Capital’s Reg D offerings to their clients.
We today report on the very nasty and vituperative ongoing lawsuit between GPB Capital and its former director Patrick DiBre. GPB Capital’s allegations against DiBre are quite serious:
The Law Offices of Johnathon W. Evans says of GPB Capital’s lawsuit against Dibre:
GPB alleged that DiBre committed embezzlement and misappropriated money from Garden City Nissan and Nissan of North Plainfield, falsified and obfuscated financial data, and interfered in the transfer of his dealerships to GPB, effectively preventing the transfers from closing while remaining in possession of over $42 million that GPB paid for dealerships purportedly still in DiBre’s name and possession; the complaint makes reference to offshore accounts, and alleges that DiBre concealed money related to the auto purchases, diverting funds for his own benefit.
The complaint alleged DiBre engaged in self-dealing through a series of fictitious invoices on behalf of APNJ Holdings Inc., a company he owns, and then leaving GPB, taking GPB Chief Financial Officer William Jacoby with him, naming Grand Central Automotive Partners as a new offering created by DiBre, and Honda of Aventura, Volvo of Glen Cove, and Honda of Freehold as additional dealerships listed in the agreement papers.
GPB alleges that DiBre began work on the Grand Central Automotive offering while Grand Central’s CFO, Jacoby, was still associated with GPB and contractually obligated to work exclusively for GPB.
According to the New York City law firm of Fitapelli Kurta, Mr. DiBre has filed a counterclaim in which he alleges that GPB Capital is a Ponzi scheme. Fitapelli Kurta details Dibre’s allegations on its website:
A former business partner of GPB Holdings, Patrick Dibre, recently filed a counterclaim against GPB in New York State supreme court, alleging that, “losses occasioned by GPB were in fact caused by a very complicated and manipulative Ponzi scheme.” Mr. Dibre’s lawsuit with GPB Holdings concerns a dispute regarding the purchase of various car dealerships…
The allegations concerning financial fraud, according to Dibre’s complaint are as follows:
* The principals of GBP allegedly “recorded the purchase price of the dealerships that they purchased from Dibre at several million dollars more than the combined actual purchase price, closing expenses and working capital investment.”
* GPB would transfer funds between related companies “in order to bolster returns if a fund was lagging behind.”
* A family member of one of the owners of GPB Capital Holdings, was hired to perform monthly accounting services. The claim alleges that the services were “either never performed or which were over billed in the approximate amount of $100,000 per month.”
* The principals of GPB expensed significant personal items, such as luxury cars, vacations and private jets.
* GPB “manipulated the financial statements of dealerships and the GPB funds to hide their activities.”
Former GPB Capital Director Jeffrey Lash filed an affidavit in which he asserted:
I am aware of no facts that would support DiBre’s allegation that GPB is a “Ponzi scheme.” Indeed, I am aware of facts that are to the contrary, including that GPB acquired substantial assets, from which earnings/profits were realized and distributed to investors.
Of note is the fact that Lash filed a lawsuit against GPB Capital in October 2018 which he then voluntarily withdrew in November 2018. The case was filed in the Eastern District of New York. Lash v. GPB Capital Holdings, LLC et al. Ref: Case Number:2:2018cv05622.
Coincident with Lash voluntarily dismissing his lawsuit , and as we reported earlier, GPB Capital’s auditor resigned. As reported by Investor Lawyers, another law firm that is also reaching out online to GPB investors:
On November 9, 2018, GPB Capital Holdings, LLC (“GPB”) notified certain broker-dealers who had been selling investments in its various funds that GPB’s auditor, Crowe LLP, elected to resign. As reported, GPB’s CEO, David Gentile, stated that the resignation purportedly came about “[d]ue to perceived risks that Crowe determined fell outside of their internal risk tolerance parameters.” GPB has since engaged EisnerAmper LLP to provide it with audit services moving forward.
The latest news was a press release of February 27, 2019 stating that GPB had sold two of its coveted Kenny Ross automotive dealerships in Western Pennsylvania to #1Cochran. GPB had not owned the dealerships very long which leads us to speculate about what these sales may signify.
Each side is throwing around extremely vicious accusations: Embezzlement, fraud, conversion, and Ponzi scheme. Given the extremely serious nature of these allegations; the large sums of investor monies involved; the SEC and FINRA investigations; and the sale of core GPB assets the situation does not look good for either side.
At the end of January 2019 GPB obtained a court order from the Special Master compelling DiBre to turn over additional documents related to reinsurance and Accelerated Service Enterprise LLC of Richardson, Texas — one of the so-called Masi entities. Over against this, GPB is being watched by numerous law firms that specialize in securities.
We will continue to monitor events at GPB Capital and report on them
GPB Capital v. Patrick DiBre.
Note: Please hover your mouse over the document to invoke the page up/page down controls at the bottom of the page frame.
Special Master Order for Additional Discovery from Defendant Dibre:GPBDibre.Additional.Discovery
Docket from the Supreme Court of the State of New York, County of Nassau:GPB.Dibre_.Docket
Categories: The Scientology Money Project