L) The Russian Mobster Michael Cherney, R) David Gentile

Western sanctions against Russia include the seizure of assets held by Vladimir Putin’s Kleptocrat class of oligarchs. Kleptocracy is the practice of the political elite plundering, stealing, or otherwise owning and controlling State assets and monies for their own use.

While these kleptocrats and political elites become extraordinarily wealthy and powerful, the common people suffer from a lack of social services that the plundered money should have otherwise been spent on. Thus arises a culture in which bribes must be paid to get medical care, building permits, and other government services. Conversely, the corrupt elites can literally get away with murder and go unpunished.

Russian oligarchs have long used corrupt banks and offshore tax havens to move their ill-gotten wealth. This money is then laundered by byzantine methods into stable Western assets, particularly prime real estate. Some of the money has went into acquiring private jets and high-profile superyachts in the price range of $100-$500 million.  Here in the US, Attorney General Merrick Garland has implemented Task Force KleptoCapture, an interagency project designed to locate and seize the American-based assets of Putin’s Kleptocrats that keep him in power.

Scientologist David Gentile was arrested and indicted in February 2021 on US Federal charges related to his $1.8 billion Ponzi scheme GPB Capital Holdings. In this article, we trace the early money that went into GPB Capital to the Russian crime boss and oligarch Michael Cherney, a man who is very well-connected to Vladimir Putin. Indeed, Michael Cherney once shared a house in Moscow with Vladimir Putin’s cousin Igor Putin. 

The Uzbek born Russian mobster and oligarch Michael Cherney a/k/a Mikhail Chernaya a/k/a Michael Chernoy a/k/a Michael Chernoi rose to power and wealth during the bloody and murderous Russian “aluminum wars” which followed the collapse of the Soviet Union. Cherney used his ties to Putin and Yeltsin to set up an essentially monopolistic business whereby he supplied raw materials to Russian aluminum factories. After oil and natural gas, aluminum is Russia’s third leading export and a source of desperately needed foreign currency. This business made Michael Cherney and his brother Lev incredibly wealthy. 

Cherney, 70, presently lives in Israel. Cherney migrated to Israel after Interpol issued a warrant for his arrest on money laundering charges in Spain. Cherney is considered to be a high-ranking member, perhaps even the Boss, of the Russian Ismailovskaya crime family which has direct ties to Vladimir Putin. Cherney has consistently denied this over the years and yet he has direct ties to Russian organized crime; other Russian oligarchs; and Vladimir Putin. During Cherney’s ascent to power and wealth he was associated with Putin’s mentor Boris Yeltsin.  

The Transborder Corruption Archives data on Cherney and the Ismailovskaya crime family was translated and a summary placed into Wikipedia for non-Russian readers:

The Izmaylovskaya gang: One of Russia’s oldest modern gangs, it was started in the mid- to late-1980s by Oleg Ivanov; it has around 200–500 members in Moscow alone, and is named after the Izmaylovo District. The Ismailovskaya mafia is closely associated with Oleg Deripaska, Andrey Bokarev, Michael Cherney, and Iskander Makhmudov through their Switzerland based “Blonde Investment Company” and is closely associated with Vladimir Putin’s SP AG (Russian: Санкт-Петербургское общество недвижимости и долевого участия, lit. ‘Saint-Petersburg Agency Group’).

An obscure CPA in Long Island named David Gentile became a Scientologist around 2012. In 2013, David Gentile founded his company GPB Capital Holdings. As we have documented, Gentile was, in this timeframe, involved in an online gaming venture with Michael Cherney’s daughters Rina Chernaya and Diana Chernaya who have received tens of millions of dollars from their father (See Gliklad v. Chernaya for a sense of just some of the money involved).

The online gaming venture was called RDRD Holdings II. The members of the partnership were Rina Chernaya, Diana Chernaya, Robert Kessler, David Gentile, and Greg Trautman. Kessler is notable as he is Michael Cherney’s NYC business attorney and advisor.

In this same period, Gentile and the Chernaya sisters were also involved in other partnerships with Gentile including DJD Holdings and DJD2 Holdings. This was the partnership from which mobster Michael Cherney’s money flowed through his daughters to David Gentile and his accomplices.

Cherney money became a key part of the seed money that went into David Gentile’s GPB Capital Holdings. In a 2019 complaint captioned Barasch et. al. v. GPB Capital Holdings et. al., the law firm of PeifferWolf issued a press release in which it stated the details of David Gentile’s ties to Russian crime boss Michael Cherney and his daughters:

Russian crime connections. While the GPB Ponzi scheme formally began in 2013 the seeds of this fraud were sowed years before when David Gentile became involved with an Eastern European organized crime family headed by Michael Chernaya a/k/a Michael Cherney. Gentile’s relationship with Chernaya, his organization, and his family ultimately led to GPB’s first portfolio assets and GPB investor funds flowing to Chernaya’s organization, an organization that included David Gentile. Michael Chernaya’s ties to foreign crime syndicates, the mafia and Russian oligarchs are extensive and well-documented. He has been denied a visa by the United States. He has been barred from Bulgaria. Court documents reveal that although he is not in the United States, his two daughters, Rina and Diana Chernaya, live in Florida and have been the recipients of tens of millions of dollars from their father.

The Barasch lawsuit described DJD Holdings:

GPB Capital, through GPB Automotive Portfolio, LP, over a period of about nine months purchased DJD Holdings, LLC, which owned a series of car dealerships under the umbrella of the Lash Auto Group. DJD Holdings, LLC, in turn, was 85% owned by CKFG Holdings, LLC, and CKFG was in turn owned by Gentile, McAnna, Ltd., Rina Chernaya, Diana Chernaya, Robert Kessler, and Gerald Francese (collectively, with CKFG Holdings, LLC, “CKFG”). Thus, GPB Capital (controlled by Gentile) bought the assets of the conglomerate controlled by Gentile and his associates, funneling money from Plaintiff and investors into the pockets of Gentile and his associate. None of these improper and self-dealing transactions were disclosed.

CKFG Holdings is an investment vehicle for Michael Cherney and his daughters Rina and Diana. CKFG is owned by McAnna L.P., another Chernaya entity. In a lawsuit filed by former GPB exec Jeff Lash, the ownership of DJD2 Holdings was specifically detailed:

DID Holdings2, LLC (“DJD2”) is a limited liability company organized and existing under the laws of the State of New York. Prior to May 13,2013, DJD2 owned 100% of the membership interests of LAG2. At that time, the membership interests of DJD2 were owned as follows: the CKGF Lash Group owned 90% of DJD2 and Steven Adam owned 10% of DJD2. The CKGF Lash Group consisted of: Lash who owned 30% of DJD2; McAnna, Ltd. which owned 25% of DJD2, Rina Chernaya who owned 12.5% of DJD2, Diana Chernaya who owned 12.5% ofDJD2, Gentile who owned 9.5% ofDJD2, Robe11 Kessler who owned 9.5% ofDJD2 and Gerald Francese who owned 1% of DJD2. Additionally, at that time, LAG2 ‘s officers were Lash, Danielle Lash, Gentile, Robert Kessler, Rina Chernaya and Steven Adam and Lash was the president and the person responsible for overseeing the operation of the LAG 2 VW Dealership. These facts are delineated in the LAG2 Dealer Agreement.

Former GPB Capital exec Jeff Lash was also arrested and indicted in February 2021 along with David Gentile and his fellow accomplice Jeffry Schneider. The three men are facing criminal trial later this year. The criminal defendants are accused Ponzi schemers who began their alleged American Ponzi scheme with the help of a Russian mobster and oligarch.

GPB Capital Holdings key insiders celebrate at Jeffry Schneider’s luxury home outside of Austin, Texas during the good old days before the arrests of the Gentile, Schneider, and Lash

The Church of Scientology became aware of the allegations against its member David Gentile in 2017 and did nothing. Scientology doctrine calls for security checks and ecclesiastical discipline against those who bring discredit upon Scientology.

However, as in any corrupt system, donations and gifts of money buys forgiveness and a blind eye is turned to the crimes of the monied elite. This helps to explain why alleged serial rapist and Scientologist Danny Masterson was not “handled” by Scientology leader David Miscavige when reports alleging the rapes with which he is now criminally charged were reported by the victims who were also Scientologists.

The 2014 Interpol Red Notice for Michael Cherney’s arrest. The notice misstates Cherney’s place of birth as Uman, Ukraine. While Cherney lived in Ukraine at one time, he was born in Tashkent, Uzbekistan when that country was part of the United Soviet Socialist Republics (USSR).

Journalist Richard Behar wrote the celebrated 1991 Time Magazine expose on Scientology entitled Scientology: The Thriving Cult of Greed and Power. Scientology retaliated by suing Time and Behar for $416 million. Scientology alleged libel and claimed the article harmed its sterling reputation. Scientology lost in court. Behar later wrote a definitive article for Fortune magazine on Michael Cherney’s rise to wealth and power along with his brother Lev Cherney. We include it here to provide readers with an excellent background on Michael Cherney:

A translation of a Spanish document describing Michael Cherney’s involvement in Russian organized crime:

The National Endowment for Democracy published an excellent short paper on kleptocracy in 2019. This is valuable reading for anyone interested in what kleptocracy is and how it works. The paper is entitled To Catch a Kleptocrat: Lessons Learned from the Biens Mal Acquis Trials in France: