GPB Capital’s Prime Automotive Group filed an amended Form 10 with the SEC on July 21, 2021. In reviewing the 10A, a few items of interest caught our attention.
- David Gentile purchased a $200,000 car from GPB Prime Automotive in October 2020. In the Form 10A, Gentile is referred to as “the Member”:
The optics of this are horrible. GPB Capital Holdings’ 17,000 investors have incurred significant losses — and some have lost all — from their $1.8 billion in investments. The firm has not paid any distributions to its investors since 2017. However, Scientologist David Gentile still has the money to purchase a $200,000 supercar.
However, it appears Gentile may be on a budget as he previously had Prime Auto purchase a 2015 Ferrari FF at a cost of $355,000 for his personal use, this as reported by dealbreaker.com:
Among other things, GPB allegedly used fund money to cover the costs of private jets, including a $90,000-a-year flight attendant, all-terrain vehicle rentals and more than $29,000 in expenses that an auditor said included “David’s 50th Bday,” according to the state’s complaint. It also claims GPB spent $355,000 on a 2015 Ferrari FF used by Mr. Gentile….
David Gentile’s Ferrari FF supercar was later sold at a huge loss in what looks like a sweetheart deal. Perhaps Gentile owed a wise guy on Staten Island a favor? The details will likely emerge in his upcoming criminal trial.
The 2015 Ferrari FF screams affluence and success. It is the perfect company car for any accomplished Ponzi Schemer. As legal records show, Gentile stuck Bob’s Buick — one of GPB’s automotive dealerships — with the $335,000 bill for the Ferrari.
Alabama’s lawsuit against GPB Capital, David Gentile et. al. details how Dave Gentile’s Ferrari deal went down:
199. Gentile even used fund assets to buy himself a Ferrari at investors’ expense. In November 2014, a Lash dealership that was a Holdings portfolio company purchased a new 2015 Ferrari FF for $355,000. A few weeks later, that dealership sold the Ferrari to another Lash operated portfolio company doing business as Bob’s Buick. Gentile has stated under oath that this Ferrari was his car for his own personal use.
200. Gentile’s brand-new Ferrari, however, was never transferred into his name. Instead, with Gentile driving it, the Ferrari stayed on the books of Bob’s Buick. Internal email traffic occasionally discussed whether Gentile would finally pay for it. He never did.
201. Finally, in 2017, GPB sold the car to someone else for $172,000. Investors in the Holdings fund bore the loss. As one employee wrote to another: “We are looking at a wholesale loss of ($183,000) that will be applied to Bob’s Buick GMC wholesale loss for the month of December 2017.”
David Gentile stuck his investors with a $183,000 loss on the Ferrari. However, Karma inevitably hammers the contemptuous and the greedy. Five months after buying his $200,000 supercar, David Gentile was arrested by the FBI on several felony charges. Bob’s Buick was able to see some justice after getting stuck with that $183,000 loss on Gentile’s con job. GPB’s investors deserve to see justice as well.
Due to his arrest, Gentile was forced to step down as CEO of GPB Capital. Things got worse for Gentile when he was next ordered to have no role whatsoever in his own company when GPB Capital was taken over by a court-appointed monitor.
It would appear that David Gentile is now only using his $200,000 supercar to drive around town to the offices of his many civil and criminal attorneys.
Several years ago, David Gentile purchased a private jet from car dealer and super-yacht aficionado John Staluppi. The jet was used for personal and business travel by GPB’s top execs. A flight attendant was hired at $90,000 a year. This was in addition to pilot and co-pilot salaries. The jet is gone these days.
In its May 2021 Form 10, GPB Capital issued the ominous statement every investor fears to read:
We have determined that there is substantial doubt as to our ability to continue as a going concern.
GPB Capital’s July 2021 amended Form 10 restated this matter with a caveat (emphasis ours):
In our initial Form 10 filing dated May 14, 2021, we determined that there was substantial doubt as to our ability to continue as a going concern. We have subsequently determined we will have sufficient liquidity to meet our obligations for a period of at least 12 months from the date of filing this Amendment No 1 to Form 10 and therefore, we have concluded there is no longer substantial doubt about our ability to continue as a going concern. However, our financial condition could be materially adversely impacted if we are unable to extend the maturity.
GPB Capital’s Prime Automotive Fund is in limbo: It is not quite dead yet. But it could be dead if it cannot extend the maturity date on its debt. Then it will be dead.
Some of GPB Capital’s debt seem to be funny money to us.
GPB Capital appears to have habitually engaged in self-dealing to loan itself money. In this recent Form 10, we are informed of an entity called GPB AISF. The Form states, “GPB AISF is an offshore financing facility formed primarily for the benefit of the Partnership.” GPB AISF is an acronym for GPB Automotive Income Sub-Fund, Ltd.
Our research shows that GPB AISF is a Cayman Islands entity with $40.6 million in assets. Where did the $40.6 million come from?
The Form 10 declares that GPB AISF is a GPB-controlled entity which exists for the benefit of the Partnership. However, how can this be a truthful statement when GPB AISF loans the partnership money at usurious loan-sharking rates of 13.5%? GPB AISF appears to be a self-dealing entity which exists solely for the benefit of its owner(s). From the Form 10, emphasis ours:
NOTES PAYABLE TO RELATED PARTIES
In October 2015, the Partnership entered into a loan agreement with GPB Borrower LLC, an affiliate of the General Partner, and received proceeds in the form of a loan of $12.0 million, maturing in October 2019. The loan accrued interest and was paid monthly in arrears at 13.5% per annum. In August 2016, the note was restructured and certain incremental procurement costs incurred at the loan’s inception were added to the existing principal, increasing the principal balance to $15.4 million (“AISF Note 1”). As part of the restructuring, AISF Note 1 was assigned by GPB Borrower LLC to an affiliate of the Partnership, GPB Automotive Income Sub-Fund, Ltd. (“GPB AISF”). GPB AISF is an offshore financing facility formed primarily for the benefit of the Partnership.
GPB AISF has a predecessor in a previous scammy entity called LSG. Specifically, David Gentile, Jeffry Schneider, and Jeff Lash have been sued for, among other causes of action, misappropriating GPB Capital investor money through a shell company called LSG. From the lawsuit filed by New Jersey against GPB Capital:
Gentile, Schneider, and Lash Misappropriated Money Through a Shell Company Named LSG
173. Gentile, Schneider, and Lash failed to disclose that they had unlawfully misappropriated portfolio company earnings from 2014 to 2016.
174. The instrumentality of this diversion was a shell company called LSG Auto Wholesale, LLC (“LSG”) – named for Lash, Schneider, and Gentile, its primary beneficiaries. LSG was formed on April 9, 2014, as a Delaware limited liability holding company. It had only three corporate members:
(1) Jachirijo, LLC (“Jachirijo”), controlled by Gentile;
(2) GPB Lender, LLC (“Lender”), also controlled by Gentile, and,
(3) EMDYKYCOL, Inc.
(“EMDYKYCOL”), a now-dissolved Florida corporation owned by Lash.
The existence of LSG and the payments through it were a secret even to GPB Capital’s own former CFO, its current Chief Operations Officer, and its former auditors. All of them testified that they had been unaware of LSG’s existence until after it was disclosed in a counterclaim filed against GPB Capital in 2018.
GPB Capital’s Form 10-A dated July 21, 2021:
Categories: The Scientology Money Project