As we previously reported, Scientologist David Gentile’s GPB Capital Holdings is presently the subject of an investigation by the SEC and FINRA. According to Investment News, the FBI and New York City Business Integrity Commission (BIC) have now stepped into the investigation. The mission of the latter agency is stated on its webpage:

The mission of the BIC is to eliminate organized crime and other forms of corruption and criminality from the public wholesale markets, the trade waste and shipboard gambling industries. BIC’s goals are numerous: to ensure that the regulated businesses are able to compete fairly; that the marketplaces remain free from violence, fraud, rackets and threats; that the customers receive fair treatment; and that the businesses which are allowed to operate in these industries conduct their affairs with honesty and integrity.

In its article entitled GPB Capital Holdings now focus of FBI investigation, Investment News writes:

Already the focus of inquiries by the SEC and FINRA, GPB Capital Holdings said on Monday that the FBI made an unannounced visit last week to the investment firm’s office in New York.

These startling new developments concerning GPB Capital come in the middle of a vicious lawsuit between GPB Capital and a former GPB Director named Patrick DiBre. We recently covered this lawsuit.

In the legal filings, DiBre has called GPB a Ponzi scheme. GPB has in turn called DiBre an embezzler who engaged in fraud and conversion. These allegations are extremely serious and criminal in nature and so the unannounced visit last week by the FBI and BIC was not surprising.

GPB Capital Holdings CEO David Gentile issued a statement to GPB investors assuring them that GPB is cooperating. This letter (see below) is rather odd as Mr. Gentile writes it from GPB Capital in care of Phoenix American Financial Services of San Rafael, California. This firm offers fund administration services for companies such as GPB. The presence of this firm seems to speak to Gentile’s efforts to put compliance measures into place at GPB. Likewise, GPB’s hiring of former SEC Division Chief Michael Cohn in December 2018 was all about compliance. However, with the FBI and BIC now openly involved, the situation at GPB has suddenly changed in a very dramatic fashion.