New details are emerging in the wake of yesterday’s bombshell announcement that the Commonwealth of Massachusetts has moved against Scientologist-owned GPB Capital for securities violations.
One of the details that stood out to us in the 47-page document filed by Massachusetts financial regulators is this:
As sole managing member, Gentile faces maximum legal and criminal exposure. There is no Board of Directors or others to whom he can point in order to shift blame.
In our view, the Commonwealth of Massachusetts has effectively pierced the corporate veils of GPB Capital and Ascendant Capital and shown these entities to be the alter ego of David Gentile and Jeffry Schneider. We see the Commonwealth’s document as laying the groundwork for a Federal RICO action. Please share your thoughts on this in comments.
Payments made to Scientology’s Hubbard College of Administration were classified as compensation:
The payments to Hubbard College of Administration were, in our opinion, likely made to pay for GPB Capital to use L. Ron Hubbard’s licensed “business technology” system. As a WISE Company (World Institute of Scientology Enterprises), GPB Capital would be expected by the Church to create a Scientology-style “Seven Division Org Board” in which the divisions of the company, its employees, and their responsibilities, are laid out on a wall chart.
L. Ron Hubbard insisted on seven divisions; no more and no less. Here is an example of a Scientology Org Board used in a Scientology Org (Scientology’s churches are called “Orgs” which is short for Organizations):
Hubbard borrowed his Org Board on an unattributed basis from the US Navy’s WWII era Org Board. A Scientology Org Board is supposed to be prominently displayed for all employees to see. In some case, clients and visitors to the facility are allowed to see it.
As a WISE company, GPB Capital would also be expected to set up a “course room” in its facilities where Hubbard’s business principles were taught to employees. As several Scientologists worked at GPB Capital this would not be unusual for them. However, this arrangement would seem strange to non-Scientologists. We once did consulting work for Scientologist-owned firm in which a Scientology course room was set up. This course room is completely out of context within a secular business. While ownership certainly has its privileges, employees have successfully sued Scientologist-owned firms for forcing them to take Scientology-based classes as a condition of employment.
To avoid lawsuits, one strategy is to hire the secular Hubbard College of Administration come into one’s firm and offer business classes based upon the teachings of L. Ron Hubbard. This appears to be the case at GPB. In any case, the payments to the Hubbard College of Administration shows a hard financial link between GPB Capital and the Church of Scientology. We are investigating other financial ties between Scientology, individual Scientologists, and GPB Capital.
Highlight articles from our ongoing two-year coverage of GPB Capital include details on key people and events:
The Background Influences of GPB Capital Holdings: Hunter Biden, a Jeffrey Epstein Associate, a Biotech Company, and a Russian Mob Connection
Scientologist David Gentile’s GPB Capital Holdings Raided by the FBI
Scientologist-Owned GPB Capital Update: GPB Exec & Former SEC Official Michael Cohn Arraigned Today for Obstruction of Justice
CONFLICTS OF INTEREST
As part of Conflicts of Interest with Related Party Consultants, David Gentile’s wife and her sibling are cited by the Commonwealth of Massachusetts:
We are withholding the name of David Gentile’s wife and her sibling for the present.
The nepotism gets worse. Former GPB Capital executive Patrick Dibre alleged in his lawsuit against GPB Capital that a Gentile family member, “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.”
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.”
Massachusetts regulators noted the “structurally complex” nature of the GPB Capital and its myriad conflicts of interest and self-dealing. We break down one long paragraph into its constituent parts:
By its nature, GPB Capital is structurally complex. Its funds have a number of sub-funds, and those sub-funds have various ownership interests in portfolio companies.
Some of GPB Capital’s funds jointly own portfolio companies, like the Prime Automotive Group. Moreover, the property on which many dealerships sit is owned by separate companies under the GPB Capital umbrella.
GPB Capital has many hundreds of bank accounts under its purview.
GPB Capital-related individuals like Gentile, Lash, Car Executive 1, and Schneider all have various ownership interests related to GPB Capital.
Unbeknownst to investors, companies in which individuals like Gentile had ownership stakes engaged in transactions with GPB Capital-related entities. Only some of these relationships were disclosed, and typically after the fact.
For example, while GPB Capital disclosed that Gentile is related to an entity called GPB Lender, LLC (which, despite carrying the “GPB” name, is not affiliated with GPB Capital), GPB Capital did not disclose that Gentile’s company would be making loans and collecting interest from GPB Capital funds.
Other entities, like LSG Auto ( owned partially by Gentile and Lash), received payments from GPB Capital-owned dealerships, without ever disclosing this fact to investors. GPB Capital even paid Gentile’s wife for “consulting” work, and sought to reclassify those payments as payroll to obfuscate where investor money actually went.
Categories: The Scientology Money Project
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