The Criminal Co-Defendants

We report on GPB Capital Holdings for many reasons. Here are four of those many reasons:

1. David Gentile is a Scientologist and a criminal defendant. There are other Scientologists in the mix and the details will likely emerge at the June 2024 criminal trial of David Gentile and his co-defendant Jeffry Schneider.

2.  As a public service to GPB Capital’s 17,000 investors. We care about the investors getting details and appreciate hearing from them. GPB Capital updates the investors on its portal. However, this is all nonpublic and does not offer the same level of details we do as an investigative journalist.

3. Money from American and Russian organized crime has gone into, and likely out of, GPB Capital Holdings. The US DoJ has been silent on this. Why the silence on a Putin-connected Russian oligarch and the waste management business in New York City? We covered the news of a leaked FBI report in which the following statement appeared:

We asked if the NY private equity company mentioned in the FBI report was GPB Capital. We still suspect it was GPB Capital.

4. Money stolen from the Brazilian national oil company Petrobas went into GPB Capital via complicit Swiss bankers. When do the Brazilian people get that money back?

The report submitted by GPB Capital Holdings court-appointed Monitor Joseph Gardemal on October 30, 2023 to Judge Margo K. Brodie shows the real numbers and puts the lie to allegations made by criminal co-defendants David Gentile and Jeffry Schneider.

Gentile and Schneider have complained in their various legal filings that the Monitor is running up excessive fees that are not justified. Coming from two criminal defendants who lost, squandered, and <redacted> over $400 million in investor capital this complaint is certainly specious. Indeed, Gentile and Schneider successfully sued to force GPB Capital to pay their tens of millions of dollars in legal fees that are still climbing. Gentile and Schneider have demanded that their legal fees continue to be paid by the company should they be criminally convicted and need to file their respective appeals.

Per Gardemal’s report, GPB Capital Holdings now has over $1 billion in investor cash placed into  conservative funds that are earning interest. The interest earned during 2022 and the first nine months of 2023 totaled $40.7 million. The interest more than offsets the $14 million in fees paid to the Monitor fees paid by GPB Capital from 2021 through Q3 2023. Gentile and Schneider have nothing to complain about.

This money is ready to distribute to investors as soon as Judge Diane Gujarti rules on the SEC’s motion to place GPB Capital Holdings into receivership. We hope that order to place GPB Capital into receivership comes soon as a holiday gift to the beleaguered investors.

Judge Diane Gujarati, United States district judge of the United States District Court for the Eastern District of New York.

Gardemal’s report offers an excellent timeline of key events at GPB Capital. The report further shows what GPB Capital CEO Rob Chimel and his team have done with the company since David Gentile stepped down as CEO. Three examples:

One of the most outrageous parts of Gardemal’s report is that GPB Capital has been forced to expend a cumulative $37 million in legal fees for the ongoing criminal and civil legal defense fees of David Gentile and Jeffry Schneider. These legal fees are called “advancement obligations.” These advancements are specified in the contractual obligations created during in the corporate formation of GPB Capital Holdings:

One item in Gardemal’s report which caught our interest was the statement that GPB Capital is engaged in:

Oversight of negotiations for extension or refinancing of senior debt at Riverwalk Project. 

We reported in 2020 on Tampa Scientologist Larry Feldman’s investment in the Riverwalk project and then his strange exit from the project. The Riverwalk project has always seemed suspect to us for many reasons and Gardemal’s report offers no clarifying details.

The report: