In our previous article we covered the latest lawsuit against GPB Capital Holdings. Captioned Ceiba Palm vs. GPB Capital Holdings, GPB Automotive Income Fund, and Ascendant Capital, we noted that this complaint contains a bombshell detail: David Muino Suarez, VP of the Swiss BSI Bank office in Brazil, was arrested in 2017 for money laundering in the $5 billion Petrobras corruption scandal.
In 2016, as the lawsuit alleges, David Muino Suarez and his partner Jan Hänggi sold $350,000 in shares of a GPB Capital fund to Miami resident Fuentes. The partners sold the fund through their Switzerland-based company JTS Investments. Notably, the partners sold Fuentes shares in GPB Automotive Income Fund, Ltd., a fund which is based in the Cayman Islands and cannot be sold to US investors.
Why is this lawsuit significant? In order to an answer that question we briefly explain the Petrobras scandal.
Petrobras is a state-owned oil company owned in Brazil. In 2007, immense offshore oil reserves were discovered in Brazilian waters. A multibillion dollar construction project was launched by Petrobras to build the vast infrastructure necessary to exploit the oil reserves. This project was paid for by Brazilian taxpayers.
The Petrobras construction project turned into one of the largest political corruption scandals ever. The scandal was called Lava Jato (the car wash). This scandal involved Brazilian political officials accepting bribes from construction companies in return for awarding these companies State contracts. These contracts were excessively padded. The companies involved not only paid bribes up front, but also secretly gave financial kickbacks to top level Brazilian political officials. The kickbacks were funded from the excessive profits. The conspirators were flagrantly plundering the national treasury of Brazil by means of embezzlement. The embezzled funds exceed $5 billion USD and some estimates place the thievery as high as $13 billion USD.
The bribes and kickbacks to Brazilian politicians were deposited into offshore shell companies across the world. This was accomplished by various money laundering techniques. Many corrupt banks and bankers were involved and facilitated the money laundering in violation of criminal law. The banks received compensation in the form of excessive fees.
Created by the Panamanian law firm Mossack Fonseca, these shell companies were designed to hide money and conceal the true identities of their owners. Mossack Fonseca is now defunct. However, it remains notorious for having created 10% of the world’s shell companies during its 40 years of operation from 1977-2018.
David Muino Suarez was arrested for laundering $21.7 million for Eduardo Cunha, the former President of the Chamber of Deputies of Brazil. Muino Suarez paid Mossack Fonseca to create several shell companies to conceal the money he had laundered for his client. Eduardo Cunha was found to have taken $40 million USD in kickbacks. He was removed from office by the Brazilian Supreme Court for his role in the scandal. Cunha was tried and sentenced to 15 years in prison.
The Petrobras scandal was covered in the Netflix show The Mechanism. The show angered former Brazilian President Dilma Rousseff. From Reuters Brazil:
Former Brazilian President Dilma Rousseff has accused Netflix of political bias and character assassination in its series based on the massive Car Wash corruption investigation that rocked Brazil’s political establishment…
Since its debut on Friday, the series called “The Mechanism” has enthralled Brazilians with its dramatization of the political scandal that contributed to Rousseff’s downfall and impeachment in 2016….
David Muino Suarez holds a dual Spanish and Swiss citizenship. He worked in Brazil for BSI Bank. His 2017 arrest took place as he stepped off a flight from Europe and landed at the São Paulo/Guarulhos International Airport. The media was present to record the arrest:
The arrest of Muino Suarez’s client Eduardo Cunha was even more high profile:
David Muino Suarez was the personal banker to the President of the Chamber of Deputies of Brazil. What was he doing selling GPB Automotive Income Fund, Ltd? One possible answer is for the purposes of money laundering. After all, the billions of dollars looted from Brazil had to go somewhere. We know from the Brazilian judicial proceedings that Muino Suarez stands accused of laundering $21.7 million for his client Eduardo Cunha. This would be easy enough to park in the Cayman Islands branch of an American private equity fund.
GPB Automotive Income Fund, Ltd is located in the Cayman Islands. More importantly, the fund cannot be sold to US residents. However, shares in this fund can be sold to a Brazilian politician who has money parked in a shell company and does not want his identity known.
The chart below shows information on GPB Automotive Income Fund, Ltd. We have placed a red arrow in the upper right hand corner to show the sharp increase in “investor” money flowing into the fund in 2014-2018:
The 2014-2018 time frame is crucial as GPB Capital Holdings did not run into any legal problems until August 2019 when it suspended raising new revenue pending the completions of SEC-mandated financials for 2015 and 2016. Before this time, GPB Capital had very positive public relations. An investment in GPB was pitched to investors as high-yield investment in the “best of class” assets GPB Capital was acquiring.
What no one seemed to be paying attention to at the time, however, was GPB’s press 2016 releases. These two press releases in April and May of 2016 should have raised serious concerns:
The April 2016 press release below states that GPB reached $500 million in capital raised from its inception in 2012. However, GPB Capital does not raise capital directly. Rather, GPB Capital raises money through its exclusive dealer Ascendant Capital which only sells GPB Capital Funds.
The next press release in May 2016 boasts that Ascendant Capital hit the magical $1 billion milestone in fundraising, thus making it a unicorn.
Our question: How did the GPB/Ascendant machine realize an increase in funds raised from $500 million to $1 billion in one month? This seems ridiculous on its face. A month has 21 business days. Ascendent Capital and its broker-dealer network of boiler rooms was not bringing in $23.8 million per day. In our opinion, the press releases are either incorrect or the GPB/Ascendant machine actually took in $500 million dollars in one month without asking serious questions about the about the provenance of the money. If that much money came in during such a short period of time, how much of it came via GPB Capital’s Cayman Island operations or Ascendant Capital’s mysterious Buenos Aires office?
The larger question we are investigating is this: What role did GPB Capital Holdings, via its Cayman Islands funds, play in the Petrobras scandal? Was this a deliberate role or did GPB Capital Cayman Island funds simply ignore KYC (Know Your Customer) rules and take the money from a Panamanian shell company created by Mossack Fonseca?
What we do have is the Petrobras scandal figure David Muino Suarez named in a US lawsuit for selling GPB Capital Holdings Cayman Islands funds. Was GPB Capital Holdings one place where Munio Suarez could launder Petrobras dollars?
What we also have is GPB Capital Holdings taking money from the Russian mobster Michael Cherney in the form of early investments in the firm made by Cherney’s daughters; GPB Capital being involved in mob-controlled waste management business in New York City; and GPB Capital and its NYC waste management component having been raided by the FBI in February 2019. Now it looks like some Petrobras money may have made its way into GPB Capital via the Cayman Islands.
Finally, we have the Church of Scientology in the background because GPB Capital Holdings owner David Gentile is a Scientologist as are several of his key lieutenants.
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Categories: The Scientology Money Project