This is as shameless as Scientologist David Gentile gets: After being indicted by the US Government for serious financial felonies in a $1.7 billion Ponzi-like scheme, Gentile now says he has a $6.1 million personal tax bill. GPB Capital already paid him $1 million, but Gentile now insists the firm must pay him another $5.1 million in investor money so he can pay the full balance of his personal taxes.
And one more thing: Gentile also expects GPB Capital investor money to pay his legal bills.
David Gentile still doesn’t seem to get it: GPB Capital is not his private piggy bank! The money belongs to the investors. It is not his money. Joseph Gardemal, the court-appointed monitor of GPB Capital told David Gentile no. There will be no $5.1 million. Now Gentile is now asking the judge to set up an arbitration where he can make his case that he is owed the $5.1 million despite the numerous civil lawsuits and the criminal charges he faces.
From WSJ PRO via Private Equity News:
GPB Capital Holdings founder David Gentile, who faces criminal and civil fraud charges related to how he ran the private equity firm, is asking for court-supervised mediation to obtain millions of dollars he says GPB owes him as its general partner and owner.
Gentile said in a letter to US District Court Magistrate Judge Vera Scanlon in Brooklyn, New York, that his efforts to obtain distributions tied to tax obligations have been stymied by a court-appointed monitor who has had final authority over the firm’s actions since February. Gentile, who founded GPB in 2013, also said he is owed $5.1m just to cover his estimated $6.1m personal tax liability for last year, after the firm paid him $1m against the obligation in January.
How does this work? We would like to see the contract which states GPB Capital must use investor money to pay 100% of David Gentile’s personal taxes in the form of distributions. Was that disclosed in the GPB Capital Prospectus? Or is this “payment” one of those seemingly endless Gentile-Schneider fees that somehow were never disclosed to investors? Gentile has not paid his investors any distributions for several years now and yet he is demanding a distribution for himself in the amount of $5.1 million. God forbid Gentile should sell off his personal properties to pay his taxes. After all, that is what investor money is for as Gentile appears to see the matter.
The Metaphysical Question: If GPB Capital paid David Gentile $6.1 million to pay his taxes, the $6.1 million would be treated as taxable income to Gentile. Would GPB then be required to pay Gentile’s personal taxes due on the $6.1 million? If so, then this would also be taxable income and so on. GPB could never fully pay Gentile’s personal taxes no matter how small the amount was as each payment to pay taxes is taxable income. Is GPB Capital trapped in a bizarre Neitzchean Eternal Tax Recursion in which it must keep paying David Gentile’s personal income tax over and over for all of eternity?
Even while preparing for his criminal trial, David Gentile still has an absolute sense of entitlement:
Gentile said he is “entitled to distributions” under the New York firm’s operating agreements, but that the firm and the monitor have blocked payments since January. He also claims GPB is obligated to pay his costs in defending legal actions against him related to the firm and its business and that GPB hasn’t paid anything toward those expenses.
Lawyers for the US Securities and Exchange Commission, GPB and the monitor have said Gentile’s request should be denied because he doesn’t qualify under mediation rules set by the court. SEC lawyer David Stoelting also cited the alleged actions by Gentile and others that led authorities to file fraud charges against him.
“The conduct for which Gentile has been charged in this action and in the parallel criminal action has caused immense harm to investors and to GPB Capital itself,” the SEC senior trial counsel said. “The management of GPB Capital and the monitor are seeking to guide GPB Capital in the aftermath of the fraud perpetuated by Gentile and others.”
The SEC brought civil fraud charges against GPB and Gentile, as well as related businesses and individuals, in February, and he stepped down as the firm’s chief executive days later. More than a half dozen states have also levelled civil or administrative charges at GPB, with New York Attorney…
Judge Scanlon hasn’t ruled on Gentile’s mediation request.
Lawyers for GPB and monitor Joseph Gardemal of Alvarez & Marsal said in separate letters to the judge that Gentile doesn’t qualify for mediation under the court’s order imposing a monitor over GPB’s management. GPB’s lawyer Glen Kopp of Mayer Brown said the firm hasn’t paid any tax distributions to Gentile since January because it is still trying to determine its taxable income for last year.
While Gentile is no longer involved in running GPB, he said in his letter that he is still entitled as the firm’s owner to information about its operations and to payments he said he is owed. But he said the firm and Gardemal have refused to provide access to GPB’s books and financial records.
Gardemal’s lawyer, Robert Buehler of Hogan Lovells US, denied those assertions, saying decisions about access to information are made by GPB management, while the monitor’s authority only allows him to approve and reject certain actions by the firm.
From WSJ Pro Private Equity
After stalling for several years and refusing to provide 2015 and 2016 audited financial statements as required by the SEC, David Gentile is now complaining that the Monitor is not giving him access to GPB’s books and financial records.
GPB Capital Monitor Joseph Gardemal says the company must provide access to the books and records and not him. What is going on here? Is Mike Frost holding out on David Gentile? “Gosh Dave, I’d really like to help you out here, but as the CEO of Highline Management I have a duty to protect GPB Capital from you and your, ahhh, your legal situation. You understand. Let me run this by the lawyers and the Monitor and get back to you.”
In Scientology terms we must ask what David Gentile has done to pull this in. He must have hidden crimes and overts.
Categories: The Scientology Money Project
Who does that guy think he is?
You’re missing the point. Gentile is trying to get paid the money sitting in the GPB account, which was “earned” as a management fee charge to the funds. The bigger question is why is GPB still allowed to charge the funds a management fee at all!
Hello Edward. We understand what David Gentile is trying to do. He is trying to get $5.1 million he says he earned as a management fee. But “earned” apropos of what? Being criminally indicted? Or earned based upon a self-dealing contract of adhesion his lawyers wrote for him? What David Gentile thinks he is entitled to is a further plundering of investor money.
David Gentile has always shamelessly overreached and he is at it again.
Seems that the audits may have uncovered some questionable accounting practices from prior years that needed to be corrected, which in turn created the $5.1 million personal tax obligation. Sounds self inflicted from a guy whose background is accounting, lol.