This particular article is intended for GPB Capital investors and others in the media and the legal community who have been following the case for many years and know the names involved. We offer this reporting as a public service for the victims of Scientologist David Gentile and his co-defendant Jeffry Schneider. Many of their victims were elderly and have passed.

Former GPB Capital partner Jeff Lash took a plea deal with the Feds. As part of the deal, Lash allocuted in court and implicated David Gentile in wire fraud. 

Jeff Lash will testify about the wire fraud.

Now we learn from documents just filed that David Gentile purportedly had conversations with one of his attorneys — who is now an alleged co-conspirator — James Prestiano.

In one of their conversations, Gentile allegedly asked his lawyer Prestiano — in the presence of Lash — if he, Gentile, was facing jail time for falsifying documents. This document takes us right into the heart of the case and shows where the government is heading.

This court document offers hard evidence from an eyewitness that Gentile was aware, many years ago, that he was breaking the law.

Gentile sought to keep this conversation from the jury by claiming it is privileged.

Judge Kovner said no and ruled against Gentile. The judge summarized the matter in her Memorandum and Order of July 8, 2024: 

I assume the parties’ familiarity with the underlying facts, summarized here only as
necessary to decide this motion.

The government seeks to prove at trial that defendants David Gentile and Jeffry Schneider, together with Jeffrey Lash, “created fraudulent performance guarantees for three car dealerships to artificially inflate the income of the GPB Holdings, LP fund (‘Holdings I’) in 2014 and the GPB Automotive Portfolio, LP fund (‘Automotive Portfolio’) in 2015.” Gov’t’s Mot. in Limine 1.

The government plans to call Lash as a witness and expects that Lash will testify about the alleged creation of fraudulent performance guarantees. Ibid. The government expects Lash to testify that James Prestiano, GPB Capital’s former counsel, “was intimately involved in the scheme, drafted the fraudulent guarantees, and served as an interlocutor between Gentile and Lash.”…

II. Communication 5 Is Not Protected Because of Lash’s Presence.

Gentile also cannot assert an attorney-client privilege with respect to Communication 5.
Gentile’s statements in that conversation allegedly seeking Prestiano’s view on whether he faced jail time may qualify as statements that impliedly conveyed a request for personal legal advice. See Stein, 463 F. Supp. 2d at 464 (citing as an “example” of when a communication might concern segregable interests of an employee “when the conversation specifically concerns the officer’s personal liability for jail time based on conduct interrelated with corporate affairs” (citation omitted)).

But Gentile cannot assert privilege as to those claims because they were made in the
presence of Lash, a third party. “A party that shares otherwise privileged communications with an outsider is deemed to waive the privilege by disabling itself from claiming that the communications were intended to be confidential.” Schaeffler v. United States, 806 F.3d 34, 40 (2d Cir. 2015). 

Judge Kovner issued her ruling which is posted below as a PDF. 

This is a major loss in court for both David Gentile and James Prestiano. Our view is that this ruling is a key turning point in the case.

Addendum: This is a letter sent by David Gentile’s attorneys to the court. Gentile’s legal team objects to characterizing James Prestiano as a co-conspirator. The problem for Gentile’s team is that Prestiano is on their witness list. What happens if the defense calls Prestiano and he has to take the Fifth on cross-examination?