SCIENTOLOGIST DAVD GENTILE WAS 2/21 INDICTED + ARRESTED BY FBI ON CHARGES related to his $1.8B GPB Capital Holdings ponzi scheme that cheated more than 17,000 investors. DID HE MONEY LAUNDER SOME OF THIS $1.8B THROUGH SCIENTOLOGY’S REAL ESTATE ACQUISITIONS IN CLEARWATER, FLORIDA + Riverwalk Project in Tampa, Florida?
ABOVE – David Gentile
BELOW – Gentile lives in Manhasset, New York
In her bombshell 2019 news story Clear Takeover, Tracey McManus revealed that $103 million in Downtown Clearwater land purchases were made by a series of LLC’s owned by Scientologists. $99 million of the purchases were paid for in cash.
Downtown Clearwater, Florida
We have previously presented a case that the $103 million was provided by Scientologist David Gentile’s GPB Capital Holdings.
Following the recent arrest of Scientologist David Gentile by the FBI on criminal charges related to allegations that GPB Capital Holdings is a $1.8 billion Ponzi scheme, Clearwater City Council member Mark Bunker raised the question about the land purchases. As reported by The Tampa Bay Times last week:
During a meeting Thursday, City Council member Mark Bunker discussed Gentile’s arrest and wondered whether he has deeper connections to the recent spate of obscure entities that have bought downtown real estate with cash.
We find it extremely provocative that the first public statement out of Scientologist David Gentile’s mouth following his arrest by the FBI is a denial that GPB Capital was part of the Clearwater land purchases. One would think Gentile would use his incredibly expensive Risa Heller damage control expert to make a relevant and highly focused statement, e.g. “I’m innocent of all charges and look forward to being vindicated during my upcoming criminal trial.”
David Gentile’s statement via Risa Heller’s firm suggests that his messaging is being controlled by David Miscavige via Ben Shaw of OSA Legal in Clearwater.
The Massachusetts securities lawsuit against GPB Capital stated that GPB has “hundreds of funds and sub-funds” and hundreds of bank accounts under its control. The Massachusetts lawsuit describes the “structurally complex” and interlocking nature of the organization in which the various funds and sub-funds own parts of each other. Therefore, while “GPB Capital” denied any involvement in the Clearwater real estate purchases, one of its many sub-funds could have been involved.
There may be semantics at work here as GPB owns many entities and sub-funds not named “GPB.” David Gentile personally owns, in whole or in part, various entities named Dripping Springs Holdings LLC, Pb&J Holding LLC, Volaire LLC, Gatsby Development, A&W Worldwide, and Jachirijo Inc., among dozens of others.
As lawsuits have revealed, Gentile used Volaire LLC to purchase a business jet for his use and that of other GPB executives. Volaire Management was used to hire and pay for air crew. David Gentile could therefore deny that “GPB Capital” had anything to do with the purchase and operation of jet aircraft. Our point is straightforward: There are many ways for a firm like GPB to engage in concealed transactions without anyone outside the inner circle knowing.
While GPB is a majority owner in many of the companies it purchases, GPB’s practice has been to allow the previous owner of a company it purchased to remain in place as the CEO. This allowed David Rosenberg to remain CEO of Prime Automotive after GPB purchased a controlling interest in Prime Auto for $235 million. Anyone not aware of this sale would assume that David Rosenberg was the CEO and owner of Prime Auto.
Again, the point to be made is that no one knows who the real owners are of the dozens of Scientologist-owned LLC’s used to purchase the $103 million in Downtown Clearwater real estate.
For these reasons, we think the FBI should investigate the provenance of the money that was used to purchase the Downtown Clearwater real estate.
As reported by the Tampa Bay Times in November 2020, David Miscavige told Clearwater mayor Frank Hibbard that the Church’s outright purchase of Downtown Clearwater real estate was not “coordinated” with the separate $103 million in real estate purchases made by Scientology parishioners.
We find Miscavige’s denial to be absurd on its face. While Miscavige denied there was any “coordination,” he did not deny specific knowledge of the parishioner purchases. We see it all as a Scientology program to force Clearwater to capitulate to the Church’s demands by using financial terrorism.
These Scientology real estate land purchases have crippled the city’s development efforts in Downtown Clearwater. As McManus documented, some of the parcels purchased went for as much as five times their appraised market value. Many of the parcels remain vacant, some are simply bare land, and there is little or no return on investment being produced from the $103 million spent on real estate.
Who has $103 million to spend in such an apparently pointless, wasteful, and profligate manner?
The only seemingly rational explanation would be a covert “money is no object” Scientology program designed to force the city of Clearwater to accede to the Church’s tacit goal to essentially exercise complete control over Downtown Clearwater.
The Church of Scientology has consistently acted in bad faith towards the city of Clearwater since it surreptitiously relocated the Apollo crew to the city in 1975 under the guise of the “United Churches of Florida.” Scientology even went so far as to attempt to frame then Clearwater mayor Gabe Cazares (1920-2006) in 1976 for a hit-and-run accident in Washington DC. This operation against Mayor Cazares was an act of retaliation for his speaking out against Scientology’s various machinations in Clearwater. Cazares and his wife sued the Church for $1.5 million and a settlement in favor the Cazares’ was reached.
There is a prior precedent of Scientology offering to pay vastly inflated sums of money for land in its attempt to economically harm Downtown Clearwater by placing a stranglehold on all chances of redevelopment. Specifically, in 2017 the city of Clearwater contractually agreed to purchase a parcel of land from the Clearwater Marine Aquarium for $4.25 million. Subsequently, Scientology leader David Miscavige, who wanted the land, stepped in and offered to pay $15 million in cash for the parcel.
Monique Yingling, the personal attorney to David Miscavige, wrote a letter blasting the Aquarium for not accepting the Church’s $15 million. What Yingling failed to address was the question of how her client David Miscavige could justify the use of $15 million tax-exempt religious dollars to further cement Scientology’s monopolistic stranglehold over Downtown Clearwater real estate.
Overpaying for a piece of land is arguably a serious breach of fiduciary duty on Miscavige’s part. Worse, using tax-exempt dollars to cripple Downtown Clearwater’s redevelopment efforts, and thereby cause economic harm to the city and the citizenry, is not acting in the public interest as is the duty of all 501(c)(3) tax-exempt religious organizations. Rather, as we have said, it is financial terrorism.
BACKGROUND: Scientologist Larry Feldman Cancels His Company’s Participation in the Riverwalk Project in Tampa; Is This Fallout From His GPB Capital Holdings Connection?
A 2018 architectural rendering of the planned 53 story Riverwalk Tower in beautiful downtown Tampa, Florida. The fate of the five-year old project was dealt a setback today when Feldman Equities exited the project.
As reported today by Tracey McManus of the Tampa Bay Times, long-time Scientologist and Tampa developer Larry Feldman of Feldman Equities announced that his firm was exiting the Riverwalk Place project. Feldman Equities had invested five years of time and an unknown sum of capital before taking the decision to exit the project. We note that Feldman Equities has purged its website of years of articles related to Riverwalk Place. These articles have been deindexed and are not available on the Wayback Machine.
Feldman Equities is a long-established and reputable company in Tampa. From the firm’s website:
Feldman Equities and its joint venture partners own or manage over four million square feet of Florida office space. Over the preceding three decades, Feldman Equities has developed or acquired over eleven million square feet of office and retail properties with an aggregate value in excess of $3 billion. The company is marshaled by its president and CEO, Larry Feldman.
With the withdrawal of Feldman Equities from Riverwalk, Two Roads Development is left as the sole project developer. GPB Capital remains as an equity participant in Riverwalk.
Riverwalk Place was a bright and shiny project in 2018. With an estimated completion cost of $350 million, there was optimism due to the roaring economy, the experience of the partners, and a promised significant investment from GPB Capital Holdings. A July 2018 article in Business Observer informed readers that GPB Capital Holdings had committed to fund the launch of the 53 story condo project in Tampa:
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.
In this same article, Larry Feldman praised his partners at GPB Capital Holdings. Feldman did so without disclosing that he was a Scientologist as were GPB’s CEO David Gentile and then Managing Director Manuel Vianna. Feldman:
We’ve known the principals of GPB for some time, many years actually,” says Feldman CEO Larry Feldman, who also is from New York originally. “They came into the project initially as a bridge lender, and then a partial equity partner, and over time, their involvement has expanded from a relatively modest investment to a greater role.”
GPB Capital’s involvement came to light in April, when Feldman and Two Roads unveiled a long-awaited Gensler design for the $350 million tower. Two Roads joined the project officially as its residential developer a month earlier.
The dollar amount of GPB Capital’s equity position in the Riverwalk project is presently unknown. What we do know from Richard Danielson of the Tampa Bay Times is that Feldman Equities paid $12.05 million for project site in 2015.
McManus asked Feldman Equities if its exit from Riverwalk Place had anything to do with GPB Capital Holdings legal problems. As her article in the TBT noted:
Feldman’s departure comes as GPB faces multiple lawsuits from investors and a former employee. The allegations include a claim that GPB operates as a Ponzi scheme. In addition, the FBI and the U.S. Securities and Exchange Commission have launched investigations.
Feldman Equities Vice President Mack Feldman declined to say whether GPB Capital’s legal issues had anything to do with Feldman’s decision to withdraw from the project.
Two obvious questions arise from Feldman Equities’ departure of what looked like an ideal scene:
1. Did Feldman Equities depart Riverwalk owing to an abundance of caution over GPB Capital’s legal situation? Feldman Equities has significant assets and would not want those potentially exposed given the increasing number of class action lawsuits against GPB Capital. CEO Larry Feldman seemed to deny this in its press release and cited differences with Two Roads:
“We wish the Two Roads team the best on their future endeavor on the site. This is a great piece of land and its potential is limitless… Nonetheless, honest business disagreements sometimes mean it is best for partners to split off and pursue their own projects. This is one of those times.”
2. Feldman Equities had five years of work and what we imagine to be considerable capital invested in the Riverwalk project. Did GPB Capital buy out Feldman’s share of the project or did Two Roads? Or did another equity partner buy into Riverwalk? The property is valuable and was already approved for development of a condo tower.
GPB Capital Holdings stopped raising new capital in August 2018 after failing to provide the SEC with its restated 2015 and 2016 financials. The firm said it needed to focus on these financials before taking in any new investor money. However, David Gentile’s firm has yet to provide these financials and has instead offered an endless series of excuses as to why it cannot produce the documents.
GPB Capital Holdings last claimed the financials could not go forward as the firm and its outside auditor had to assess the impact arising from the February 2019 arrest of its CCO Michael Cohn on obstruction of justice charges. Moreover, the firm’s own internal audit committee had resigned in late November 2019 during the Thanksgiving Day weekend here in the US. The situation at GPB Capital Holdings has devolved into a Kafkaesque nightmare for investors. The flood of lawsuits against GPB Capital Holdings and its broker-dealers shows the outrage of investors.
GPB Capital’s apparent inability to deliver on the $70-$105 million to launch construction of Riverwalk appears to have driven the partners elsewhere in search of cash infusion in mid-2019. As Business Observer reported on January 19, 2019, the Riverwalk Place partners turned elsewhere for capital:
Developers of the $350 million Riverwalk Place condo tower in downtown Tampa have secured $24.5 million in construction financing from Mosaic Real Estate Credit LLC.
Riverwalk Place’s website noted that this $24.5 loan from Mosaic was secured against $80 million in presales:
July 2019: Riverwalk Place stopped taking presale reservations. The project had originally been conceived of a mix use development of office space and residential condos. Larry Feldman changed the planned 53 story tower to an all-condo design. The Tampa Bay Times reported on the change:
The developers of Riverwalk Place have stopped taking reservations for condos in the 50-plus story tower planned for the downtown riverfront.
A statement Friday attributed only to “Riverwalk Place” indicated the halt was temporary and did not stem from any major problems with the project.
“Now that the tower will be all residential, the designers are updating floorplans,” the statement said. “Once complete, buyers can reserve those updated plans. We continue to market the project, and potential buyers have always been welcome to visit the sales center to learn all they wish.”
In November , it was revealed that the tower would be totally residential except for restaurants on the ground floor. “A developer’s job is to fill demand,” Feldman said at the time, “and the demand tells us people want condos.”
September 2019: The CapTrust building was demolished to make place for the Riverwalk Tower. We assume some of the proceeds from the Mosaic construction were use to pay for the demolition. Richard Danielson of the Tampa Bay Times wrote:
Demolition of the old CapTrust building at W Whiting Street and S Ashley Drive began Wednesday. The project will clear the space, once touted as the future home of Trump Tower Tampa, for a condominium tower of more than 50 stories called Riverwalk Place. No explosives are to be used during demolition, which is expected to take several weeks and require some traffic detours, as well as the closing of the Riverwalk next to the job site during the work. Developers with Feldman Equities of Tampa and Two Roads Development of West Palm Beach have not said when they plan to start construction on Riverwalk Place.
It seems strange that developers would demolish a large building without having a definite date for starting new construction. Generally, developers proceed quickly due to the costs of paying interest on construction loans. Was there a period of flux during which time GPB Capital Holdings was working on a plan to invest in Riverwalk? Is this why Feldman Equities remained in the project until March 2020? What made Larry Feldman exit the project after five years of hard work? Perhaps Feldman Equities couldn’t continue on with Riverwalk Place absent the lack of capital it had counted on from GPB Capital Holdings.
Where Two Roads Development goes with its Riverwalk Place project remains to be seen. The financial crisis created by the global coronavirus pandemic has shaken markets and investors to the core.
Update from the Tampa Bay Times. See Richard Danielson’s latest piece on Riverwalk place.
Below: GPB Capital Holdings lists Riverwalk Tower on its website as an “acquired property.” This is quite different from being an “equity participant.” We’re researching the ownership of the Riverwalk property.
Scientologist Herb Zerden’s AGR Group — another company we’ll cover in a future article — is also listed in the “Special Situations” page of GPB’s website:
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