Ambrose Cell Therapy

Scientologist David Gentile, Founder and CEO of GPB Capital Holdings: Company Under SEC & FINRA Investigation

Increasingly, as Tony Ortega has shown with reports about ‘whales,’ Scientology and David Miscavige are relying not on growing membership but extracting as much money as possible from Scientology’s wealthiest donors. So, we like to keep an eye on those rich church members, which has been getting more and more interesting lately.

In particular, we’ve been looking at a wealthy Scientologist named David Gentile (pronounced “gen-TILLY”). In 2013, Gentile founded GPB Capital Holdings, an investment company headquartered in New York. The company’s website shows that its managing director is another Scientologist, Manuel Vianna, someone we’d noticed was working with fellow Scientologist Matthew Feshbach at Feshbach’s Okyanos Heart Institute in the Bahamas.

Matt Feshbach and Manuel Vianna. Feshbach owes the IRS $3.8 million in back taxes. The US
Appeals Court refused to allow him to discharge this debt in bankruptcy.
See Feshbach v. Dept of Treasury

Our research into Okyanos in the Panama Papers and press releases of the period revealed that Scientologist Ali Shawkat invested $14 million in Okyanos. Ali Shawkat’s father is Mudhar Shawkat who was a member of the Iraqi Parliament in the last decade and was, at one time, considered to become the next Prime Minister of Iraq. The Shawkat father-son team sold a telecom they owned in Iraq and moved $140 million out of the country when they immigrated to Canada. Shawkat also came to our attention when he appeared in Scientology’s IAS Impact magazine as a $5 million donor to the IAS.

Ali and Noor Shawkat receiving their IAS trophy for donating $5,000,000

It’s not surprising that rich Scientologists are investing in each other’s companies, but it’s something we like to keep an eye on.

Feshbach sold Okyanos in 2017 for an undisclosed sum. As reported here at Tony Ortega’s Underground Bunker, Feshbach owes the IRS $3.8 million in back taxes; his appeal to discharge this debt in bankruptcy was denied in 2018. And as we recently reported on the Scientology Money Project, Matt Feshbach has re-entered the stem cell business in Plano, Texas under the name of Ambrose Cell Therapy.

But getting back to Gentile and his New York investment company, GPB’s website says that the firm is “focusing on acquiring income-producing private companies.” GPB Capital has a collection of at least 63 broker-dealers who raise money from private investors. This money is then pooled and invested in companies that may not have access to mainstream sources of capital — companies that banks may be reluctant to loan money to because they’re start ups, or they have heavy debts, or they’re in bankruptcy protection and need capital to restructure. GPB’s acquisitions have focused on car dealerships, waste management firms, healthcare, biotech, and the purchase of debt. GPB’s website claims to have raised $1.5 billion in private capital and used that money to invest in the 160 companies in its portfolio.

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. The world of private placement money is characterized by these high fees. Additionally, GPB pays itself fees incurred in advising and managing the companies it either purchases or takes an equity position in.

GPB raises money from private investors under what is called Regulation D (informally called “Reg D”) of the Securities and Exchange Commission (SEC). Reg D investments are considered high risk. From Investopedia:

Regulation D is a Securities and Exchange Commission (SEC) regulation governing private placement exemptions. Reg D allows usually smaller companies to raise capital through the sale of equity or debt securities without having to register their securities with the SEC. Reg D offerings are advantageous to any private company or entrepreneur because they allow an entity to obtain funding faster and to avoid the costs associated with a public offering. Within the regulation are directives that, based on which rules are applied, may allow offerings to be openly solicited to prospective investors in their network.

The SEC is more blunt in its characterization of Reg D investments, which are also known as “private placements” as the money moves between private investors and private companies such as GPB Capital:

Generally speaking, private placements are not subject to some of the laws and regulations that are designed to protect investors, such as the comprehensive disclosure requirements that apply to registered offerings. Private and public companies engage in private placements to raise funds from investors. Hedge funds and other private funds also engage in private placements.

As an individual investor, you may be offered an opportunity to invest in an unregistered offering. You may be told that you are being given an exclusive opportunity. The opportunity may come from a broker, acquaintance, friend or relative. You may have seen an advertisement regarding the opportunity. The securities involved may be, among other things, common or preferred stock, limited partnerships interests, a membership interest in a limited liability company, or an investment product such as a note or bond. Keep in mind that private placements can be very risky and any investment may be difficult, if not virtually impossible to sell.

GPB’s troubles with US regulators began last year when the firm missed an April 30 filing deadline with the SEC. The firm said it needed more time in order to restate its 2015 and 2016 financials for these funds:

GPB Automotive Portfolio: $622.1 million

GPB Holdings II: $645.8 million

A company that has to restate financials from previous years raises red flags. A firm with proper internal accounting and compliance controls is able to produce accurate financial statements to required SEC deadlines. However, Gentile seemed unfazed by this missed SEC deadline. Indeed, an article in Business Observer in July 2018 informed readers that GPB Capital would invest in a 53 story condo project in Tampa. Called Riverwalk, the project belongs to Feldman Equities, a firm owned by long-time Scientologist Larry Feldman. The Business Observer article quotes Feldman on GPB’s major commitment to the Riverwalk project:

Feldman says GPB Capital could provide all of the necessary equity to launch the project, which would amount to between $70 million and $105 million, based on traditional commercial real estate lending standards. It’s expected that Feldman, Two Roads, Tower Realty Partners and others may contribute equity to Riverwalk Place, as well.

The Riverwalk computer renderings are as good as Scientology Ideal Org renderings. This is no surprise as Gensler, Scientology’s go to designer for Ideal Orgs, is also the designer on Riverwalk:

On the heels of Feldman’s statement in July 2018 that GPB was making a huge investment in Riverwalk, Gentile announced in August 2018 that GPB Capital would temporarily stop raising money. As Bruce Kelly of Investment News reported:

A leading seller of high-risk, high-commission private placements, GPB Capital Holdings, with $1.8 billion in investor money, will take a break from raising new money to focus on straightening out the accounting and financial statements of its two large funds.

Kelly then cited a letter from Gentile to GPB investors:

“While growth has led to many successes, it has also come with challenges,” according to the letter, which was signed by GPB Capital CEO David Gentile. “There is much work to be done with respect to integrating the high volume of recent acquisitions into their respective platforms in order to execute on our performance objectives.”

As an update to this story, Business Observer just reported that Larry Feldman and his partners in the Riverwalk Place condo tower in downtown Tampa have secured $24.5 million in construction financing from Mosaic Real Estate Credit LLC. This is worth noting as Feldman was quoted as saying that GPB was good for $70-$105 million in Riverwalk Place. This does not appear to be the case.

In September 2018, The Massachusetts Securities Division began an investigation into GPB Capital Holdings’ network of 63 broker dealers in Massachusetts. Boston is a powerhouse financial center in the US and so the investigation raised serious concerns. GPB issued a statement through a spokesman:

“GPB Capital Holdings, LLC is aware that certain broker-dealers have received requests for information from the Commonwealth of Massachusetts. GPB Capital is not in a position to comment on that matter. As we have previously disclosed to investors, GPB Capital is in the process of completing the audits of the financial statements for certain of its funds and is currently not accepting new capital from investors until that process is complete,” said a spokesperson on behalf of GPB Capital.

How long can it take GPB Capital Holdings to do financial statements? Gentile is himself a CPA. The law firm of Gana Weinstein raised this point in September 2018 when it began reaching out online to GPB investors who may have suffered losses. Gana Weinstein’s comments also speak to the brokers being investigated:

Investors should be concerned at this point as it is highly unusual for funds of this size to cease raising funds unless there are serious concerns. Moreover, delays in reporting financials and the need to release new reports concerning financial statements made three years ago are highly troubling. This suggests potentially multiple years of false information or a size and nature that is currently unknown.

Brokerage firms have been all too willing to subject their clients to the risks of investing in GPB due to the hefty fees the company pays to firms. When GPB Capital’s automotive portfolio raised a total of $369.2 million from more than 3,800 investors it paid out $43.4 million, or 11.75 percent, in commissions. Seven percent of that amount goes directly to the recommending broker’s pocket. There are as many as 60 brokerage firms that sold these funds and among the largest of those firms are Royal Alliance Associates Inc., Sagepoint Financial Inc., FSC Securities Corp. and Woodbury Financial Services Inc.

Despite the sharks beginning to circle, the financial statements still were not forthcoming. Then the big news came in November 2018: GPB’s outside auditing firm resigned. As reported by Investor Lawyers, another law firm that is also reaching out online to GPB investors:

On November 9, 2018, GPB Capital Holdings, LLC (“GPB”) notified certain broker-dealers who had been selling investments in its various funds that GPB’s auditor, Crowe LLP, elected to resign. As reported, GPB’s CEO, David Gentile, stated that the resignation purportedly came about “[d]ue to perceived risks that Crowe determined fell outside of their internal risk tolerance parameters.” GPB has since engaged EisnerAmper LLP to provide it with audit services moving forward.

In December, Bruce Kelly of Investment News reported that FINRA and the SEC had opened new investigations:

In the wake of a state investigation into broker-dealers selling private placements by GPB Capital Holdings, the Financial Industry Regulatory Authority Inc. (FINRA) and the Securities and Exchange Commission have launched their own investigations, according to sources.

As GPB’s apparent problems develop, we’ll continue to keep an eye on it.

At this point, however, GPB sure looks like it has a lot in common with Scientology itself: excessive secrecy, a lack of financial transparency, and one-sided contracts in which GPB has all the power and the investors have virtually no power and no say in how their money is spent. Unlike Scientology, however, GPB Capital Holdings cannot claim religious status as a defense against governmental investigations.

Scientologist Matt Feshbach Back in the Stem Cell Therapy Business


As we previously reported, Scientologist Matt Feshbach and his investors sold their Okyanos Heart Institute in the Bahamas sometime in 2017. Okyanos having been sold, Matt Feshbach next ran into a brick wall with the US Tax Court when it ruled that he could not discharge in bankruptcy the $3.8 million in back taxes he and wife Kathy owe the IRS.

The Feshbach’s are appealing this matter. Not one to let $3.8 million in back taxes get in his way, however, Matt Feshbach has once again resurfaced in the stem cell therapy business. His new firm is called Ambrose Cell Therapy LLC. Based in Dallas, Texas Ambrose filed as an LLC on August 18, 2017.

There is a stampede to get into the stem cell therapy business in Texas since the 2017 passage of “Charlie’s Law” (HB 810) which allows chronically and terminally ill people the right to opt for non-FDA approved treatments with adult stem cells. In her article published at medium.com Dr. Kirsten Matthews,  a Fellow in Science and Technology Policy at Rice University’s Baker Institute for Public Policy, reported on Charlie’s Law:

In the 2017 Texas legislative session, which ended on May 31, the state lawmakers passed a new bill to expand the state’s ‘Right to Try’ law — H.B. 810, also known as “Charlie’s Law.” The new law, which takes effect September 2017, allows patients who are chronically ill access to experimental stem cell-based interventions (SCBI) and permits clinics to charge patients for their ‘costs.’ While the law seems like a huge win for patients, it might also hurt the same people it is trying to help by reducing their protections. In contrast, the new law does place the state of Texas in a position to more readily regulate clinics providing experimental SCBIs, closing down those which are fraudulent.

In an article published in the Texas Heart Institute Journal, Dr. Iltis and I describe the risks associated with unregulated clinics offering unproven or experimental SCBI. The new Texas law would essentially circumvent the US Food and Drug Administration (FDA) and their Expanded Access Program (EAP), which regulates clinical trials and access to experimental therapies. It also bypasses many of the required ethical and informed consent rules required by the FDA…

Dr. Matthews and her colleagues noted in their recent paper:

Born of the expectations and hype associated with stem cells and regenerative medicine over the past two decades, there are now numerous clinics around the world selling stem cell-based interventions (SCBI) that have yet to be proven effective or safe, with little to no accounting of the outcomes being collected. SCBI treatments might hold the key to help patients, but they also have serious risks of side effects, including graft-versus-host disease, unintended harm, and even cancer. Clinics are charging exorbitant prices, some for more than $20,000 per treatment.

Given the potential size and money to be made in this market, there was a big push to pass Charlie’s Law by those people and companies in Texas that stood to financially benefit by operating stem cells clinics.

Prior to the passage of Charlie’s Law, there was a great deal of lucrative stem cell medical tourism being enjoyed by Mexico, Feshbach’s Okyanos Heart Institute in the Bahamas, and many other clinics outside the US. These non-US clinics do not have FDA approval for the procedures they sell and deliver nor do they require such.

Charlie’s Law allows Texas to compete with these non-US clinics by offering non-FDA approved treatments to the chronically and terminally ill. Charlie’s law also significantly limits the liability of the doctors and providers that deliver these non-FDA approved procedures.

The logic of Charlie’s Law is that if someone is in chronic pain or dying then they have a right to try non-FDA approved adult stem cell treatments. The extremely specific and narrow focus of Charlie’s Law shows it to have been the result of intense lobbying by a specific group of people with a vested interest in adult stem cells.

These people include former Texas Governor Rick Perry whose wife Anita Thigpen Perry serves on the Board of Directors of Celltex Therapeutics Corp of Houston, Texas. In 2017, Rick Perry earned $175,000 as a consultant to Celltex. The company itself moved its operations to Mexico in 2013 after failing to comply with several issues raised by the FDA. Rick Perry was confirmed by the Senate as the US Secretary of Energy in the Trump Administration.

EMBRYONIC STEM CELLS VS. ADULT STEM CELLS

One of the key distinctions to understand in stem cells is the difference between embryonic stem cells and adult stem cells. An excerpt from the National Institutes for Health:

Human embryonic and adult stem cells each have advantages and disadvantages regarding potential use for cell-based regenerative therapies. One major difference between adult and embryonic stem cells is their different abilities in the number and type of differentiated cell types they can become. Embryonic stem cells can become all cell types of the body because they are pluripotent. Adult stem cells are thought to be limited to differentiating into different cell types of their tissue of origin.

Embryonic stem cells can be grown relatively easily in culture. Adult stem cells are rare in mature tissues, so isolating these cells from an adult tissue is challenging, and methods to expand their numbers in cell culture have not yet been worked out. This is an important distinction, as large numbers of cells are needed for stem cell replacement therapies.

Embryonic stem cells can differentiate into any structure in the body. However, embryonic stem cells can only be harvested from embryos. These embryos are donated by women who have frozen and stored them with fertility clinics for the purpose of in vitro fertilization (IVF) procedures. Following successful IVF procedures, many women wish to donate the frozen embryos they will not be using to the service of science. This practice naturally raised moral concerns in the American Religious Right. As a result, Federal laws enacted under the G.W. Bush Administration placed wide-ranging medieval and anti-scientific restrictions on stem cell research. For this reason, Charlie’s Law does not allow embryonic stem cells to be harvested or used in treatment.

Adult stem cells are harvested from the belly fat around an adult’s stomach. This fat is called adipose tissue. Thus, a patient becomes his or her own stem cell donor. Essentially, belly fat is extracted using liposuction or other means and then centrifuged in order to harvest stem cells. These stem cells are injected back into the patient’s body to treat various conditions. Unlike embryonic cells, however, adult stem cells cannot differentiate into any structure. This is one of the issues that make the many promises offered by adult stem cell therapy treatment providers so controversial.

THE FDA & STEM CELLS

Bianca Castro of NBC Dallas-Fort Worth reported in May 2018 on Federal prosecutors filing injunctions against stem cell treatment clinics:

Federal prosecutors in California and Florida filed injunctions on Wednesday to stop two companies from providing stem cell treatments, alleging the clinics marketed their procedures as remedies for ailments including cancer and heart disease without proof of safety and efficacy, according to this statement from the Food and Drug Administration.

The firms put consumers at risk by promising benefits from treatments and products never approved by the FDA, the Justice Department alleged in court filings in both states.

The filings target two companies, one of which is affiliated with Innovations Stem Cell Center of Dallas.

But now, the FDA is filing a lawsuit to stop these kinds of stem cell therapies.

The FDA says they’re not approved because they haven’t been proven to be safe and effective…

The Cell Surgical Network released the following statement regarding the lawsuit:

The Cell Surgical Network (CSN) intends to vigorously defend the lawsuit filed today by the U.S. Department of Justice on behalf of the U.S. Food and Drug Administration. CSN strongly rejects the idea that a person’s own cells should be regulated by FDA as a drug. On behalf of all Americans, we look forward to protecting patients’ rights and the physician-patient relationship. We share FDA’s concern for patient safety, but do not believe that FDA regulation of a surgical procedure that simply harnesses the healing power of a patient’s own cells, without altering the biological characteristics of those cells, is the answer. The decision of whether or not the surgical procedure is performed should be made by the patient and physician – not the FDA or any other arm of the federal government.

The Cell Surgical Network is an industry trade group that is attempting to set accreditation standards and make adult stem cell therapy a legitimate form of medical practice. To accomplish this goal, stem cell treatment providers, at present, need be excluded from FDA requirements. Stem cell advocates are trying to do this, in part, by arguing that a person’s own stem cells cannot be regulated as a drug by the FDA. Yet this argument is specious inasmuch as stem cell providers are extracting adipose tissue and extracting stem cells for the express purpose of medical treatment.

Adult stem cell providers want it both ways: They want to claim that their treatments are efficacious in treating a wide variety of medical conditions, and, they want to practice medicine without FDA approval. In this sense, these stem cell treatment providers are following the same story arc as anti-vaxxers: People should be allowed to make their own medical decisions and damn the science, dangers, and governmental restrictions.

Stem cells are classified as a drug under the FDA’s definition of a drug:

The Federal Food Drug and Cosmetic Act (FD&C Act) and FDA regulations define the term drug, in part, by reference to its intended use, as “articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease” and “articles (other than food) intended to affect the structure or any function of the body of man or other animals.” Therefore, almost any ingested or topical or injectable product that, through its label or labeling (including internet websites, promotional pamphlets, and other marketing material), is claimed to be beneficial for such uses will be regulated by FDA as a drug. The definition also includes components of drugs, such as active pharmaceutical ingredients.

Stem cells are intended for “use in the diagnosis, cure, mitigation, treatment, or prevention of disease” and are therefore properly classified as drugs. Stem cell treatment providers want to circumvent this definition and Charlie’s Law represents one such attempt. The litigation expected to arise from Charlie’s Law will test the legality of this particular piece of legislation. To argue that a dying person should be allowed to do whatever they want ignores the larger moral question: Should stem cell opportunists be allowed to exorbitantly profit from the desperation of the chronically ill and the dying by selling them non-FDA approved treatments? Another question: Do the chronically ill and the dying have the mental capacity to consent to spending large sums of money on unproven treatments? Or are they being driven by irrationality in their great suffering and mortal fear?

MATT FESHBACH, MUDHAR SHAWKAT, AND BOB DUGGAN

That Matt Feshbach is promoting stem cell therapy is old news; he first began investigating stem cells in 2009. His fellow Scientologist Ali Shawkat was the “angel investor” whose money funded Okyanos. From an article at Finsimes.com in 2014:

Okyanos Heart Institute, a Freeport, Bahamas-based developer of advanced coronary artery disease treatments, said it raised $8.9m in its Series B funding.

According to a written note, the round was led by Passion Group founder Ali Shawkat.

Passion Group’s single page website describes what the group is and does:

Ali Shawkat and his wife Noor and into the Scientology IAS for at least $10,000,000 USD based upon this particular IAS trophy:

Shawkat’s father Mudhar Shawkat — a former member of the Iraqi Parliament — is detailed in the Panama Papers. The entry on Mudhar Shawkat in the Panama Papers describes his activities and, in the final paragraph, alludes to the Shawkat’s investment in Feshbach’s Okyanos Heart Institute:

According to 2008 confidential emails, the lawyer representing Shawkat and his son, Ali, asked Appleby to hold in escrow about $140 million, the proceeds of the sale of the Shawkats’ shares in a joint venture with a Kuwaiti telecommunications company. The law firm refused that request but accepted them as clients later in 2008.

Appleby set up the Passion Group Trust for the benefit of Mudhar Shawkat’s family members and registered three affiliated companies in the British Virgin Islands in 2008 and 2011, according to the files. Shawkat was identified in the Appleby documents as an “additional settlor” (a person who creates and funds a trust) of the Passion Group Trust and as a shareholder of Passion Investment Ltd., the trust’s investment arm.

However, upon the incorporation of a not-for-profit entity, which was also a beneficiary of the trust, concerns about the Iraqi family’s reported association with Chalabi emerged at the law firm. “It is suspicious,” an Appleby employee wrote in an email, “that they are setting up a charitable company offshore [Passion for Change S.A.] for funds coming out of Iraq – there does not seem any benefit other than lack of accountability in doing so.” But Appleby continued to provide services to Shawkat and his family after the firm’s managers noted that, other than accusations of favoritism in the award of government contracts, there were no allegations against Shawkat.

In the following months, in 2009, the leaked files show that the Shawkats transferred more than $30 million to the family trust and one of its affiliated companies, some of which was converted into shares. Board meeting minutes of Passion Investment Ltd. chaired by Shawkat’s son show that from 2013 to 2016, the company has invested in two medical companies and in an Iraqi dealership for Peugeot cars.

Mudhar Shawkat and his Scientologist son Ali Shawkat are connected to Matt Feshbach via the Shawkat’s Passion Investments Ltd., Passion Group, and Passion Trust.

We have also previously shown that Scientology billionaire Bob Duggan and another Scientology OT named Michael Holstein are connected to the Shawkat’s Passion companies as shown in the Panama Papers. The Shawkats and Bob Duggan are linked via a company called Genuine First Aid International:

Matt Feshbach’s new Ambrose Cell Therapy is worth documenting here at the Scientology Money Project for three reasons:

1. Matt Feshbach filed for bankruptcy and is trying to discharge $3.8 million USD he owes in back taxes. Feshbach told the bankruptcy court and the US Tax Court that he has no money and virtually no income.

2. In September 2008, the Fessbach’s made an Offer in Compromise (OIC) to the IRS to settle their 2001 tax debt of $3.6 million for $120,000, this to be made in payments over 48 months. The IRS declined the Fessbach’s unreasonable offer to settle for pennies on the dollar of the amount owed.

Judge McEwen of the US Tax Court wrote:

Feshbach.1

3. Given Matt Feshbach’s financial position we must ask where the money for his new Ambrose Cell Therapy LLC came from. Is it more Shawkat money? Or has Feshbach found other investors? While Bob Duggan has invested in two pharmaceutical companies, we personally cannot see Duggan investing in stem cells as, unlike pharmaceuticals, the science and the FDA approval process is not there. Duggan became a billionaire by complying with scientific protocols and the FDA approval process when he was the CEO of Pharmacyclics. Of course, we could be wrong. Other smart investors and institutions are putting money into stem cell companies. Perhaps most notably Texas A&M has signed a deal with Celltex Therapeutics Corp. for “a multiyear agreement for research into potential Alzheimer’s therapies.”

Matt Feshbach has a talent for reinventing himself. It remains to be seen if his once legendary talent for making enormous sums of money remains: Can Matt make lightning strike twice?


Ambrose Cell Therapy LLC filing from the Texas Secretary of State’s Office. Note: Please hover your cursor over the document to invoke the page up/page down and size controls at the bottom of the page frame.

Ambrose Cell Therapy - TX SOS_


Dr. Kirstin Matthews and her colleagues Bhavana Kunisetty and Keri Sprung discuss Charlie’s Law (HB 810). Note: Please hover your cursor over the document to invoke the page up/page down and size controls at the bottom of the page frame.

Stem.Cell.Paper.Charlies.Law