September 16, 2022: David Gentile and his criminal co-defendant Jeffry Schneider filed a motion to get the criminal indictment against them dismissed and have asked for an evidentiary hearing:
PLEASE TAKE NOTICE that upon the accompanying Memorandum of Law, supporting declarations and exhibits, that Defendants Jeffry Schneider and David Gentile will move this Court, before the Honorable Diane Gujarati, United States District Judge for the Eastern District of New York, at the United States Courthouse located at 225 Cadman Plaza E, Brooklyn, NY 11201, on a date and time to be determined by the Court, for an order dismissing the Indictment against Jeffry Schneider and David Gentile and for an evidentiary hearing.
David Gentile and Jeffry Schneider complain at length in a subsequent filing (scroll down to read the PDF) about how the indictments against them should be thrown out because, among other things, GPB Capital’s court-appointed Monitor Joseph Gardemal is a State Actor who refused to use GPB Capital funds to pay the bills for their criminal defense.
Gentile and Schneider sued GPB’s Monitor to force the company to pay their criminal defense bills. David Gentile is also seeking to force GPB Capital to give him $5.1 million he claims he is owed to pay his 2021 income taxes.
GPB Automotive’s SEC Form 10-K informs us that the Chancery Court in Delaware ruled Schneider was entitled to advancement of his legal fees:
Jeffry Schneider v. GPB Capital Holdings, LLC et al., Case No. 2021-0963 (Court of Chancery, DE):
In November 2021, Plaintiff, a former affiliate of GPB Capital Holdings, LLC, filed a Complaint in Chancery Court in Delaware against GPB Capital Holdings, LLC and each of the funds it manages, including the Partnership, seeking a ruling that he is contractually entitled to mandatory advancement of legal fees by GPB Capital with respect to several lawsuits in which Plaintiff is named. On March 24, 2022, the Chancery Court issued a bench ruling, finding that Plaintiff was entitled to advancement of his legal fees from GPB Capital. GPB does not anticipate any of the legal fees relating to the matter to be charged to the Partnership.
In the Kafkaesque world of private equity, owners and partners can be criminally charged and yet the shareholders are legally obligated to pay the legal bills. This is due to the many self-serving clauses deeply embedded within the fine print in the investment documents signed by often unsophisticated investors. This is why the Broker-Dealers who sold GPB Capital funds to such investors are losing big in FINRA arbitrations and being ordered to pay back investors tens of millions in damages. Kalos Capital went bankrupt due to paying on GPB Capital claims:
A toxic private equity fund complex [GPB Capital Holdings] that’s plunged multiple broker-dealers into regulatory and legal trouble has now brought one big Georgia firm to a premature end.
Kalos Capital, a firm in the Atlanta suburbs run by Daniel and Carol Wildermuth, filed for Chapter 11 protection in a federal bankruptcy court on Monday. According to the bankruptcy statement, Kalos, which once boasted 100 registered producers, $28.5 million in revenue and 60 offices, was finally overwhelmed by litigation relating to GPB Capital Holdings LLC.
David Gentile filed the same action as Schneider for advancement of his legal fees in the Chancery Court in Delaware:
David Gentile v. GPB Capital Holdings, LLC et al., Case No. 2021-1102-SG (Court of Chancery, DE)
On or about December 20, 2021, Plaintiff David Gentile, founder and former Chief Executive Officer of GPB Capital Holdings, LLC, filed a Complaint in Chancery Court in Delaware against GPB Capital Holdings, LLC and each of the funds it manages, including the Partnership, seeking a ruling that he is contractually entitled to mandatory advancement of legal fees by GPB Capital with respect to several lawsuits in which Plaintiff is named. GPB does not anticipate any of the legal fees relating to the matter to be charged to the Partnership.
Due to the many perceived injustices he has suffered, David Gentile was, apparently, so overwrought by it all that he filed a motion to amend the conditions of his release on bond so he could travel to Italy to help his aged father. Sounds like Dad was used as a pretext for a luxury vacation paid for by GPB Capital investors. David Gentile fiddles while Rome burns. Gentile appears to not care so long as his investors pay for his legal bills and vacations while it all goes up in flames.
David Gentile got his vacation in Italy, but it was quite possibly ruined by his ruminations over all of the wiretaps and just how much the Feds have on him and his partner in crime Jeffry Schneider.
David Gentile and Jeffry Schneider claim they are the real victims here and the Government and the GPB Monitor are persecuting them. The two con men even complain that the government has poisoned the potential jury pool and so they cannot get a fair trial. We just heard that exact same argument put forth by Scientologist Danny Masterson’s attorney Phillip Cohen at Masterson’s rape trial which ended in a hung jury. The jury was not poisoned in the Masterson case despite the pretrial publicity.
The Gentile-Schneider soap opera could come straight from the Church of Scientology which schizophrenically teaches that it can make you an Operating Thetan who is at cause over matter, energy, space, and time while also screaming that Scientologists are victims of the media, the Psychs, the Courts, Politicians, Big Pharma, etc.
Despite claims of OT powers, what many Scientologists so often actually need far more than auditing sessions are non-Scientologist lawyers, i.e. wog lawyers. Likewise, wog lawyers like Scientology and Scientologists because they are steady and good paying clients inasmuch as they are always in some kind of legal trouble.
The Bottom Line: Scientology and Scientologists and their countless wog lawyers are in a codependent relationship.
Below is the “We are the Real Victims Here!” motion filed by Gentile and Schneider on October 28, 2022 seeking an oral argument. The complaint is captioned:
REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF JEFFRY SCHNEIDER’S AND DAVID GENTILE’S JOINT MOTION TO DISMISS THE INDICTMENT AND FOR AN EVIDENTIARY HEARING
Categories: GPB Capital Holdings, The Scientology Money Project
Are they still not incarcerated?? They sound like “covert narcissists” meaning they can’t see past the end of their own noses and are always considered “the victim” in their minds.
Jeff, another great job here digging up the sordid details of the GPB case.
Don’t forget that motions to dismiss are usually routine in criminal prosecutions at various points during the process. So this may be just standard lawyering, and the lawyers who wrote the motion may not have any real expectations of its success. They figure they are duty-bound to try just in case they somehow get lucky.
The comments about Kalos Capital show just what kind of D-list firms were pushing the GPB product. The article says that they have 100 producers to generate $28.5 million in revenue at some point in the past when the firm peaked. A “producer” is a fully registered broker who is able to have any sort of conversation with a client that leads to orders and to the generation of commission dollars. The “Financial Advisor Magazine” publication where the article appeared would likely correctly characterize this as registered brokers, whereas the mainline business press might get it wrong and characterize all “registered personnel” as brokers, whether they actually generated commission dollars or not.
The point of all of the above is that when you divide $28.5 million in firm revenue by 100 people, that means each person generated, on average, $285,000 in commissions. Using standard ratios for compensation in the brokerage business, that means the average producer would be earning about $120,000 per year. Junior associate analysts with 1-2 years of experience after school earn a lot more than that at Global Capitalism HQ. The probability is that most of the producers earn less.
Cross-checking with other databases suggests that the 100 employee number is high and that Kalos had on the order of 60 total employees (I’d guess 40 brokers), which would mean about $700,000 in revenue (not salary) per broker per year. I don’t have current data for retail brokerage operations because I’m focused on “institutional” (i.e., serving hedge funds and mutual funds) and the numbers are much bigger there. The same general distribution would hold true: a handful of brokers make most of the commission dollars and the rest are making worse money than they could make selling cars.
I’m an investor in GPB Holding II. Any new news to share?