The Scientology Money Project

The End Game: With $1 Billion Cash in GPB’s Accounts, Deposed CEO David Gentile Attempts a Coup to Regain Control of the Company; The SEC Counters and Seeks to Place GPB into Receivership

After being criminally charged in February 2021, Scientologist David Gentile, the sole owner of GPB Capital Holdings, voluntarily resigned his positions as CEO of both GPB Capital and its operating arm Highline Management.

In the same time frame, Joseph Gardemal III became the outside court-appointed Monitor. His job is to oversee GPB’s affairs and protect shareholder value.

When David Gentile stepped down from his positions, Rob Chmiel became the interim CEO of GPB Capital. Mike Frost was appointed Chairman of the Board of Highline Management.

Under the watchful eye of Monitor Gardemal, Rob Chmiel and GPB’s Board began to sell off GPB Capital’s assets. The largest single deal was the September 2021 sale of GPB’s Automotive Portfolio for $880 million to Group 1 Automotive. Other GPB assets were sold including Alliance Physical Therapy and a ±30-acre parcel of land in the Port of Newark which was owned by GPB Cold Storage.

The sales of of GPB’s assets has left the firm with $1 billion in cash in its accounts according to reports. This much cash in the accounts of the company he owns has, apparently, left David Gentile salivating at the prospects of jumping back in as the CEO.

As part of what some are characterizing as a “Memorial Day Coup”, Gentile wrote a letter informing GPB CEO Rob Chmiel that he, Gentile, had appointed three new managers to direct GPB. Before this letter, Gentile had been the sole manager of GPB. He has attempted to expand management to four members and ordered CEO Chmiel to run his decisions by the managers for approval.

It certainly appears that David Gentile is engaging in “good ol’ boy” cronyism, i.e. that he is using friends as proxies in his attempted coup to take back control of GPB Capital Holdings. The cronyism allegation is reinforced by the fact that the new managers can be paid up to $400,000 a year each; receive legal indemnification for their acts; and immediately qualify for “fee advancement rights.” This is a deluxe sweetheart deal for Gentile’s pals to be sure, but is it even legal?

David Gentile’s attempted coup has set the stage for the end game. Gentile wants to take over GPB Capital and, rather incredibly, he claims it is an ongoing concern even after 90% of its assets have been sold off. Conversely, the SEC and the GPB Monitor Joe Gardemal want to place the firm into receivership as soon as possible and distribute the assets to the investors. After that, the firm would be wound up and dissolved.

The warring parties are set to slug it out in court in the very near future.

David Gentile’s letter to GPB CEO Chmiel dated May 27, 2022:

Two of David Gentile’s choices as new managers are Mike Fasano and Rick Murphy. Mike Fasano is an attorney who worked for Kobre & Kim, one the law firms which represents David Gentile.  Fasano is now the managing partner at the Fasano Law Firm, PLLC in Miami. Rick Murphy has worked for Gentile in the past helping to identify companies suitable for acquisition by GPB Capital Holdings.

What grabbed our attention was Gentile’s appointment of long-time Scientologist Matt Judkin as  the third new manager. Matt Judkin has a sketchy past; no experience in private equity; and certainly no experience in managing corporate funds anywhere even remotely near $1 billion dollars.

Along with his fellow Scientologists Adolfo Quintero, John Woodruff, and Herb Zerden, Matt Judkin was named in a 2006 Agreed Final Judgment and Permanent Injunction which was made with the State of Texas.

Without admitting wrongdoing, these Scientologists agreed to shut down their scammy “mortgage foreclosure assistance” company and pay Texas the following amounts: $100,000 in civil fines and penalties; $175,000 in legal expenses; and $475,000 to reimburse 338 Texans who were victims of the defendants mortgage foreclosure scam.  The total settlement paid by was $750,000.

Matt Judkin had to sign the judgment and injunction with Texas, thus indicating his role in the mortgage foreclosure scam. Further, Matt Judkin was cited by name in the judgment and injunction and specifically ordered to not destroy any records, books, etc.:

That the court ordered Judkin and his Scientologist colleagues not to destroy evidence is certainly disturbing and raises questions about what happened back in 2006.

In his attempted coup to seize control of GPB Capital, David Gentile attacked CEO Rob Chmiel by stating in a court document that he, “lacks [] the requisite experience to manage and oversee an investment and advisory company such as GPB.” (Docket 80 at 12-13). For the record, Rob Chmiel has a Wharton MBA and was a senior executive with The Walt Disney Company where he participated in the launch of Disney Online.

Conversely, Matt Judkin has worked in the telemarketing industry for the past 20 years. Judkin works for Herb Zerden, a Scientologist and telemarketer who owned AGR Group. AGR has telemarketing call centers in Las Vegas and  Barranquilla, Colombia. When Gentile was at the helm of GPB Capital, he purchased AGR Group from Herb Zerden along with 14 other companies owned by Scientologists as we documented. These are the AGR companies Matt Judkin has worked at:

30) AGR Customer Service, LLC (dba EnergyCare)
31) AGR Group, LLC
32) AGR Group Nevada, LLC

David Gentile proposes to put a second-rate telemarketing exec into a senior management role at GPB Capital to review the decisions made by a Wharton MBA with experience as a senior Disney exec. Further, Chmiel and his team have managed the sale of $1 billion in GPB assets with no problems. Why do they need a telemarketer to advise them?

This may seem completely stupid to outsiders. However, based upon our many years of investigative reporting on Scientology, the appointment of the unqualified Judkin suggests to us that he may have a dual role. First, he would be a rubber stamp who would be there approve anything David Gentile wants. Second, our opinion, and it is only an opinion, is that Scientology’s notorious intelligence agency, the “Office of Special Affairs” or “OSA” wants an embed inside of GPB Capital Holdings to see what risks may exist there for the Church of Scientology.

Several Scientologists have worked for GPB Capital over the years, most notably Manuel Vianna and former Sea Org members Brian Marshall and Dustin Muscato. Moreover, there are legitimate questions to be asked. For example, did David Gentile overpay for the Scientologist-owned companies he purchased? A larger question we have asked: Did the $103 million Scientologists spent on real estate in Clearwater in 2017 come from GPB Capital? The provenance of the $103 million remains secret and yet it had to come from somewhere.

David Gentile’s hubris knows no bounds. He seeks to take over GPB using proxies even as he is headed towards criminal trial later this year for several felony charges connected to his alleged private equity fraud at GPB Capital.

What triggered David Gentile’s attempt to retake control of GPB Capital via proxies?

Perhaps he feared that the Monitor planned to place GPB Capital into receivership. Once  placed into receivership the proceeds would be distributed to investors. The firm would then be wound up and dissolved. It is game over for David Gentile. All that remains for him would be his criminal trial followed by eight US State Attorneys General lawsuits for securities fraud and other causes of action.

This is a “do or die” for criminal defendant Gentile. He has made his move to retake control of the company. The effort seems doomed to failure. Does Gentile think he can invest the $1 billion and magically earn a quick and massive return that would make his investors whole — and thus let him walk away from the criminal charges? This is what the late Scientologist and Ponzi schemer Reed Slatkin thought, in his desperation, when his $600 million Ponzi was falling apart in the 1990’s and the walls were closing in on him.

In a letter to the court, the SEC argues that GPB Capital should be placed into receivership. The SEC sent its letter to the Honorable Margo K. Brodie, the Chief US District Judge for the US Eastern District of New York. Excerpts of the SEC’s letter:

The SEC’s letter to Judge Brodie and David Gentile’s reply to the Judge follow as PDF’s. The Court has scheduled a conference and given each side until June 14, 2022 to submit further briefs.

THE SEC Letter to Judge Brodie: 

David Gentile’s reply to the SEC’s letter to Judge Brodie: 

6 replies »

  1. I’m not a lawyer. But the idea that a fraudster could escape criminal liability by taking over, locking up all invested funds and eventually making investors whole (requiring the feat of doubling the cash, no less) seems preposterous. Even if he did, how would that make the crime go away any more than returning a snatched purse to its owner does?

    However, further looting the remaining considerable assets always remains an option. It’s disgusting he’d even ask, and I sincerely hope that this conduct will find its way before a jury in due time.

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