Hidden Fees Scientologists
David Gentile and his partners had raised an incredible $1.8 billion from
17,000 investors. And from this money, they went ahead and took a whopping $216 million
worth of hidden fees, fees that went right into lining Gentile and his partner’s pockets.
The money from investors funded a completely decadent lifestyle that included exotic cars,
private jets and lavish parties. For example, Gentile had a $30,000 dollar 50th birthday
dinner that was paid for by investors. In a much worse example, Gentile bought a brand
new 2015 Ferrari FF that cost $355,000. And yes, he put THAT on the books for investors to pay!
Scamming Group Jeffry Schneider was
the second-in-command. The two con men built their lifestyle full of mansions, luxury cars,
and private jets on the backs of innocent hard-earners and honest businesses. 17,000
investors put in their money in their phony equity firm in hopes of an 8% return on investment.
Instead, they ended up blowing investor money. It wasn't just a two-person job. The involvement
of Jeffrey Lash also filled a key role in making the scam a success. Each individual had
a part to play, even though one may have a more predominant role than the other. David Gentile
was charged with the most sentences. A resident in Manhasset, New York, and the CEO of GPB Capital,
he made all the important decisions for the company to keep the scam funds rolling. Before
forming this Ponzi, Gentile was a licensed public accountant at an accounting firm.
He leveraged his skills and experience to grow the Ponzi scheme into a billion-dollar venture.
Jeffry Schneider from Austin, Texas, held four licenses from the Financial Industry
Regulatory Authority. He facilitated the scam by masking it behind legitimate documentation
and licenses. He was also CEO of Ascendant, a company that partnered with GPB Capital,
the phony private equity fund company. He knew his way around working a business. The GPB
Capital firm promised its investors 8% return on investment by securing their money into car
dealerships. Jeffrey Lash, a GPB Capital managing partner, and a Naples, Florida resident, was
supervising their investments in car dealerships. All three of these Ponzi Scam defendants,
along with other perpetrators, were involved in defrauding investors through
omissions and material misrepresentations. According to The Scientology Money Project,
The private equity's formation started in 2007 when Jeffry Schneider and David Gentile met
for the first time, and things began to escalate. Around the period of 2002 and 2012, DOR BioPharma,
a major pharma company, saw a future in CPB Holdings. This set the stage for David Gentile,
Jeffry Schneider, and Jeffrey Lash to come together and start one of the biggest Ponzi
schemes in the country. The Scam
Gentile used Jeffrey Lash's firm to contact brokers and created a false narrative behind
the GPB funds, convincing brokers to tell their clients to invest in the private
equity firm. They promised 8% in returns, as they were putting the money in cash flowing
investments in mostly car dealerships and real estate. Of course, that was far from the truth.
They held due diligence meetings and private dinners with investors, telling them how they
use funds to invest in lucrative portfolio companies that generate consistent cash flow.
The profits accumulated from these investments were to be distributed among the many investors
sending the funds, or at least they were led to believe. But there simply weren't any profits.
They were also told that their payments wouldn’t undermine the invested capital. The dream set in
front of misleading investors was that they could liquidate their invested capital for an
incredible return or choose to receive monthly distributions as a source of passive income.
Initially, the GPB Funds raised capital with the help of Ascendant, Jeffery Lash's
company. This company employed workers whose only job was calling brokers and investment
advisers telling them to sell GPB Funds to their clients, and how their clients could
benefit from the investment. Ascendant was also responsible for organizing events and seminars
which glorified the fraudulent GPB Funds. This collaboration between GPB Funds and
Ascendant was the fuel that powered a meticulously devised scam, one that
raised over a billion dollars. David Gentile and Jeffry Schneider worked together to make
the operations and marketing of GPB Funds more developed and legitimate. In contrast, Jeffrey
Lash made sure to only push GPB Funds to RIA and Brokers by the marketers working at Ascendant.
Even though they did invest some of the funds in automotive portfolios and holdings,
they misrepresented the amount of money these companies were making.
They simply were cooking the books and the companies weren’t creating the cash flow that
was shown to investors. Just like any other ponzi scheme, they gave old investors with
promised returns, from new investors' money. And of course, they siphoned off the rest of the money
with hidden costs for their own personal luxuries. The GPB fund started to show its true colors when
massive shortfalls began happening as more and more people started withdrawing their investments.
Employees at GPB regularly sent emails to the owners, which depicted the huge margins
between how much they received and how much they were paying out in distributions. It was only a
matter of time before everything hit the fan. Internal conversations between the three
shareholders discussed the massive shortfalls in the GPB Funds. This made it obvious that the
holding companies were losing money, and investor funds were being seriously misappropriated.
Mob Ties In an article by Reuters Intelligence,
a leaked FBI Intelligence report showed concerns about money laundering risks involving private
equity firms. In further reports by the Scientology money project, David Gentile and
Jeffry Schneider had previous ties with Russian investors due to their interest in DOR BioPharma.
This company had a chain of ownership linked to Russian mobsters. Overall, evidence suggests
that the reports of a Russian investment of $100 million involve GPB Capital Holdings.
The FBI has shared details explaining why this particular equity firm would be involved in money
laundering. One pertains to the company's location in Delaware and Cayman Islands. Companies in these
areas confide in bank secrecy laws, which allow them to hide their transactional practices. It's
important to note that DOR BioPharma's major stakeholder, Michael Chernaya, was responsible
for kick-starting GPB Capital, providing David Gentile with its first portfolio asset.
Michael Chernaya's connection to foreign criminals, mafia, and Russian elites is
well-known and documented. He also can’t enter the US. His two daughters reside in Florida,
enjoying millions of dollars from him. Lifestyle
With the siphoned money of honest workers, these three scammers enjoyed millions in scammings.
David Gentile wasn’t shy using investor money. Remember the previously mentioned Ferrari at
the beginning of the video? In November 2014, at one of the dealerships that was
supposed to be a company that generated lots of money for investors, Gentile
bought that new 2015 Ferrari FF for $355,000. His Ferrari was never transferred into his name,
and this was intentional. Instead, with Gentile driving it, the Ferrari stayed on the books of
the company. Even in internal company emails employees occasionally discussed whether Gentile
would finally pay for the car. He never did! But finally, in 2017, GPB sold the car to someone
else for $172,000. Needless to say, investors in the fund took the loss. If you’re following along
doing the math, that was a $183 thousand dollar loss that the holding company officially took.
They also used investor money to make leisurely trips on private jets worldwide. Investigators
also found an American Express bill titled “David's 50th Bday” priced at around $30,000,
as we mentioned at the beginning of the video. Thanks to this Ponzi, the car David Gentile
purchased ranged over $2 million to give you a scale of their spending power. Amongst all
the other outrageous spending, GPB also spent the fund money on private jet costs, including flight
attendant services costing around $90,000 a year. This wasn’t all. David Gentile was ticking boxes
off the luxury checklist. He didn’t stop at the private jets. He also
bought super yachts from John Staluppi, the same car dealer who got him the private jet.
Scientology Gentile and his partners weren’t
the only Scientologists to scam a giant amount of money. Reed Slatkin was another Scientologist
scammer just like them. His Ponzi scheme was actually the biggest scam ever at the time.
From 1986 to 2001, Slatkin raised approximately $593 million from about 800 wealthy investors.
Slatkin created and operated an informal “investment club” where investors simply
gave him money to take care of. Most of Slatkin’s early investors were his fellow Scientologists,
and he soon had roughly seven million dollars under management. Slatkin did use this money
to buy and sell stocks, but in the quarterly statements he mailed out, Slatkin misrepresented
returns to his investors as being 25%. This brought in more investors. He simply was paying
old investors with new investors money. But in 1993, he made a $75,000 investment
in a tech startup called EarthLink, which was founded and owned by fellow
Scientologist Sky Dayton. EarthLink was an incredible success and turned Slatkin’s
$75,000 investment into $100 million dollars. This made Slatkin look like a genius investor,
and his fund got even more investor money from that point. Slatkin’s downfall began from
there as his later investments and lifestyle slowly drained investor funds. Eventually,
the FBI uncovered Slatkin’s Ponzi scheme. The Church of Scientology fought to try
to keep the millions they got from Slatkin in donations, but they eventually gave back three
and a half million in ill gotten gains. This begs the question whether the Feds
will go after the Church as well after dealing with Gentile and his partners?
These were a couple of the biggest Ponzi Schemes ever, and both are associated with the Church of
Scientology. Aftermath
According to the SEC complaint, New York Attorney General Letitia James filed charges that require
the scam artists to pay $700 million in restitution. Lash's lawyer told clients
that he wouldn’t plead guilty. It’s difficult to investigate Ponzi scams where a fraudulent motive
shadows an underlying layer of legitimacy. Gentile, Schneider, and Lash are
still waiting for their day in court. Click to watch one of these next videos!
Let us know in the comment section what you’d rather do,
become a scientologist and have to follow their rules or have higher taxes!