Hostages by Michelle Ross

This is what it has come down to: David Gentile is holding his 17,000 investors hostage to his insane demand that he be allowed to take back control of GPB Capital Holdings.

Gentile has had no role in the company since he voluntarily stepped down as CEO in February 5, 2021 following his felony criminal indictment. (United States v. Gentile, et al.). When he left, Gentile appointed his CFO Rob Chmiel to be the new CEO of GPB.

GPB’s Monitor Joseph Gardemal wants to put the company into Receivership and distribute the remaining $1 billion in cash to the 17,000 investors. Gentile opposes this and the matter is headed to court.

In a surprising development, Rob Chmiel agrees with Monitor Gardemal in wanting GPB placed into Receivership and the  $1 billion distributed to the investors as quickly as possible. Chmiel stated this through his attorneys in a letter to US Judge Vera Scanlon.

David Gentile refuses to do the right thing for his investors and simply agree to an SEC Receivership which would release $1 billion dollars back to his 17,000 investors, many of whom are over 65 years old. None of Gentile’s investors have seen any of their money since 2018 when GPB Capital stopped distributions.

Gentile raised $1.7 billion from his investors. He wiped out $700 million through fraud; incompetence; shady deals with fellow Scientologists; egregious self-dealing; and the excessive upfront and management fees Gentile and Schneider charged their investors.

As noted in our 2019 report, Gentile and Schneider paid their network of Broker-Dealers a hefty 7.9% commission to sell GPB Capital to retail investors; there were other upfront fees as well:

Gentile’s broker-dealers make a commission of 7.9 percent on private capital raised for GPB. Others in the loop, for example those who refer investors to GPB’s brokers, make a percentage as well. The total commissions on money invested in GPB is about 12 percent. Thus, a private investment of $100,000 in GPB is reduced at the outset to $88,000…  Additionally, GPB pays itself fees incurred in advising and managing the companies it either purchases or takes an equity position in.

Based upon GPB Capital’s excessively high 12% in commissions and fees, the investors lost $204 million upfront.

Gentile has already gone to court and forced his investors to pay his massive legal bills. And now he is bleeding them for more money with his legal war to take back control of GPB Capital. Gentile also thinks the investors should pay his income taxes.

There is no end to David and Joanne Gentile’s rapacious greed. The couple does not care if David’s investors ever get any of their money back. David and his wife Joanne Gentile live a luxurious lifestyle while the investors suffer.

In a letter from GPB Capital to Judge Vera Scanlon dated May 8, 2023, GPB Capital management broke sharply with David Gentile and sided with the SEC by formally requesting that the court grant the Receivership demanded by GPB’s Monitor:

GPB Capital’s management scathingly attacked David Gentile’s attempt to take back the company and said it is nothing more than a blatant attempt at self-dealing designed to financially benefit Gentile and his cronies whom he appointed as managers:

David Gentile’s predatory self-dealing attempt to seize control of GPB Capital ran into instant opposition. GPB Capital was handcuffed and could do nothing:

Rob Chmiel pointed out the very serious dangers to the investors if David Gentile is allowed to persist in his deranged attempt to once again defraud his investors by taking back control of GPB:

The letter of May 8, 2023: