Downtown Clearwater

We recently reported on a leaked FBI Intelligence Bulletin which mentioned “more than $100 million in wire transfers” that came from a Russia-based company and flowed into the coffers of a NYC private equity firm:

We asked if this New York-based private equity firm could be GPB Capital Holdings whose sole owner is  Scientologist David Gentile. In support of our question, we cited the ties of both David Gentile and GPB Capital to the purported Russian mobster Michael Cherney  via his daughters Rina and Diana Chernaya. Gentile also has ties to Cherney’s US business agent Robert Kessler. Indeed, Chernaya and Kessler money were behind GPB Capital’s first major VW car dealership.

In our previous article on the FBI Intelligence Bulletin we were careful to state that no conclusions could be made absent solid evidence. We will therefore continue to watch for any developments.

Nevertheless, our mind raced towards another scenario. Journalist Tracey McManus of the Tampa Bay Times wrote an incredibly well-researched article in 2019. McManus opened her article with a bombshell revelation:

THE CHURCH OF SCIENTOLOGY and companies run by its members spent $103 million over the past three years buying up vast sections of downtown Clearwater…

Most of the sales have not previously been reported. The Tampa Bay Times discovered them by reviewing more than 1,000 deeds and business records, then interviewed more than 90 people to reconstruct the circumstances surrounding the transactions…

Nearly all of the properties were bought through limited liability companies, which are required to disclose their operators but not their owners. Although that arrangement is standard in real estate, it makes it impossible to know whether the properties are owned by the Scientologists who manage the companies, the wealthy church or another hidden party.

But companies controlled by different parishioners bought neighboring properties that create clear assemblages of land.

This takes us back, once again, to what the Commonwealth of Massachusetts stated in its recently-filed civil lawsuit against GPB Capital Holdings:

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.

The time frame of the $103 million in Scientologist-controlled real estate purchases in Downtown Clearwater occurred from February 2017 to the fall of 2019 when GPB was awash in cash. Indeed, as the Massachusetts lawsuit noted:

As time went on and GPB Capital raised more money, it was unable to deploy its capital efficiently.

GPB Capital couldn’t spend its $1.8 billion fast enough. To this point, we previously reported on how Scientologist David Gentile, the sole owner of GPB Capital Holdings, offered his fellow Scientologist Larry Feldman anywhere between $70-$105 million in financing to begin construction on Feldman’s Riverwalk Development. These figures were mentioned in a July 2018 article in Business Observer article. As McManus reported in March 2020, Feldman exited the Riverwalk project.

AN OCEAN OF CASH

GPB had an ocean of cash it needed to spend in 2017. With apparently few new cash-generating deals being purchased by GPB Capital during this period, the only way the firm could pay its existing investors their 8% distributions was from new investor monies. GPB Capital Holdings was plunging into Ponzi scheme territory.

McManus cited a stunning fact about the Scientologist-controlled real estate purchases:

All together, 32 companies bought 92 downtown properties since 2017. Of the $103 million spent, $99 million was paid in cash… The greatest number of properties were bought by companies controlled by either Israeli businessman Itzhak Zano or another Scientologist who represents him.

Did the $103 million in Scientologist-controlled Clearwater real estate purchases come from one of GPB Capital’s sub-funds? How is it that Scientologists suddenly had a war chest of $99 million in cash in 2017 just as Scientology Capo di tutti capi David Miscavige decided he needed to punish Clearwater by buying a huge amount of land Downtown in order to cripple any possibility of a sorely-needed redevelopment?

Miscavige was furious that the City of Clearwater refused to sell him a parcel of valuable land he wanted Downtown. At that time, GPB Capital had money pouring in as a result of the excessive commissions it was paying its Broker-Dealers. There is certainly a reasonable argument to be made that GPB Capital purchasing $100 million in prime Downtown Clearwater real estate was a good investment in 2017; particularly if David Miscavige had privately committed to put his support behind a redevelopment effort that was owned and controlled by wealthy individual Scientologists and the Church of Scientology. This hypothesis was plausible in 2017.

GPB Capital had done well with its 211 Schermerhorn development in Brooklyn’s Boerum Hill district. Schermerhorn was a $47 million dollar development. The success of this deal resulted in David Gentile’s offer to finance Larry Feldman’s Riverwalk in an amount between $70-$105 million. GPB Capital had also purchased some land by the docks in New Jersey where it built a cold storage unit for fresh fish coming in from the boats. This was the beginning of GPB’s Cold Storage Fund.

The foregoing is speculation on our part, but the theory does connect some dots. Again, we conclude as we did in our previous piece:

Those of us who have been closely following the GPB Capital story are tempted to read between the lines with this particular bit of information. However, such temptations must be avoided given the sheer size of the $10 trillion private equity market and the vast space this affords to shelter criminal activity. Indeed, the lack of financial accountability and the protected secrecy inherent in the private equity market affords it virtually the same protections as religions have in America when it comes to money. This is appalling to consider. It seems that if one is an aspiring criminal in America he or she should begin either a religion or a private equity firm.

Our disclaimer having been made, our underlying question remains valid: Where did the $103 million Scientologists used to purchase real estate in Downtown Clearwater in 2017 come from? We are also curious about Israeli mystery man Itzhak Zano.