In February 2021, we told you that Scientologist David Gentile was charged by the New York Attorney General’s office for operating what it called a $1.8 billion Ponzi scheme, paying older investors with money from newer investors of a company called GPB Capital Holdings.
Since then Gentile’s criminal case has gone slowly and we’ve had few updates for you. But some very interesting things have been going on in a parallel case involving GPB Capital and the SEC, which is suing the firm.
Jeffrey Augustine, who first made us aware of the trouble surrounding GPB Capital before Gentile was even charged, has kept an eye on the SEC case, and tells us there are some real eye-opening developments going on which he’s been detailing at his blog.
First of all, after Gentile was charged, he resigned as CEO of GPB Capital, and in an agreement with the SEC he turned over control of it to an outside court-appointed monitor named Joseph Gardemal.
Augustine tells us that Gardemal then sold the automotive portfolio of the company for $880 million, along with some other assets, and GPB Capital suddenly had about $1 billion in liquid assets it didn’t have before Gentile’s arrest.
So then, according to documents filed by the SEC, Gentile tried to get his hands back on the company by attempting to appoint three new hand-picked directors named Matt Judkin, Rick Brown, and Michael Fasano, so that he would then have control.
What the SEC didn’t mention, but that Jeffrey noticed, was that Judkin himself is a longtime Scientologist.
“Joseph Gardemal, the appointed Monitor, responded to Gentile’s attempt to take over the company by filing papers with the court to immediately convert GPB’s monitorship into a receivership,” Jeffrey says. “Gardemal basically called for a ‘game over’ in which the $1 billion would be distributed to shareholders, the firm’s remaining debts paid off, and GPB Capital Holdings dissolved. The stage is now set for a court battle in the US Eastern District Court of New York. The opposing parties are the SEC and Joseph Gardemal on the one side and on the other side David Gentile and his cronies Matt Judkin, Rick Brown, and Michael Fasano.”
And there’s another development that also has the SEC seeing red.
On July 21, David Gentile’s criminal defense attorney, Daniel J. Horwitz, filed a request with the court to allow Judkin, Brown, and Fasano to be represented in the civil case by an attorney named Steven L. Hayes.
The SEC is opposing this. Why? Here’s what the SEC says…
Gentile’s Manager Nominees [Judkin, Brown, and Fasano] are attempting to do what Gentile himself has admitted he cannot do: take control of [GPB Capital Holdings]… Although the Commission would not ordinarily oppose a motion to appear pro hac vice, Mr. Hayes’ filing is at bottom an unsupported motion by the Gentile Manager Nominees to intervene in this civil enforcement action to request that the Court order some unspecified mediation, to respond to any objections to their request for mediation, and to be involved in any such mediation. However, it is clear that the Gentile Manager Nominees have no absolute right to intervene in this action and the Court should not permit them to intervene.
The SEC doesn’t want the interference from Gentile’s hand-picked directors, and so it is taking the unusual step of opposing an out-of-town attorney coming in to represent them, which would usually be a formality.
But here’s what the SEC doesn’t point out, and that Jeffrey does: Steven L. Hayes is a name that longtime Scientology watchers should recognize.
The Scientologist lawyer has appeared in Scientology’s Freedom magazine, but he’s best known for being the lawyer who, in 1996, bought up the assets of the Cult Awareness Network after it was bankrupted in a lawsuit filed by a plaintiff who had been recruited by Scientology and represented by Scientologist attorney Kendrick Moxon.
The way that CAN was sued, bankrupted, and ultimately bought and operated by Scientology is a legendary one in this field. To see the very attorney who was part of that operation showing up to represent David Gentile’s handpicked board nominees in a fight with the SEC suggests only one thing to Jeffrey Augustine: David Miscavige smells that mountain of $1 billion in GPB’s liquid assets, and wants some say in what happens to it.
“Hayes has no legal experience within the area of private equities, securities law, or white collar criminal defense. That Hayes has no experience in the big league US Federal Eastern District Court of New York reinforces my estimation that the 75-year-old Hayes is being sent to babysit Judkin and Gentile at the orders of Miscavige,” Jeffrey says.
The SEC filed its opposition to Hayes being admitted to the court just this week. So we’ll be very interested to see how the court responds.
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Today’s Scientology happy news. Yes, an excerpt from an actual press release put out by the church this week.
Over 270 Scientology Volunteer Ministers who have volunteered over a million hours, sanitizing thousands of buildings across the nation while protecting millions across the country, participated in a memorable award ceremony held at the Castle Kyalami in Midrand this week to be acknowledged for the incredibly selfless work done over the past two years.
Attending the event included what seems to be a long list of “Who’s Who” such as the MEC ( Member of the Executive Council ) for Health and MEC for Education of the Office of the Premier of Gauteng, representatives of the Social Development Department Gauteng, Department of Justice of Gauteng, South African Local Government Association (SALGA), National Disaster Management, Chief of Police of the Tshwane Metro Police, Emergency Services of Tshwane, Joburg and Ekurhuleni, representative of Mogale City and many police officers of Gauteng.
Each of the speakers was very laudatory about the Scientology Volunteer Ministers, truly appreciating the work they have done for their country. In expressing themselves, they said, “We can’t possibly figure out where we would have been without you. It is just indescribable.” “We have never seen anything like that before.”
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Now available: Bonus for our supporters
Episode 6 of the Underground Bunker podcast has been sent out to paid subscribers, and it’s a conversation with Pete Griffiths about how he managed to run a Scientology mission after being declared SP. Meanwhile, we’ve made episodes 1 through 5 available to everyone, with Sunny Pereira dishing secrets of Scientology’s Hollywood Celebrity Centre, Bruce Hines on the crazy life in the Sea Org, Jeffrey Augustine on recent Scientology court cases, Claire Headley exposing Tom Cruise, and Marc Headley on what it must be like for David Miscavige living in Clearwater, Florida. Go here to get the episodes!
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“Now, what’s the matter with the planet at this particular time is ethics is out. And that is proven by the fact that you are having a hard time getting tech in. With the technology which you know at this particular moment and the results which you are delivering even at lower levels, you have a total monopoly of all mental activities, all religious activities and all social activities on this planet. That is what you are entitled to at this moment. Do you have them? Well, therefore, tech is out. Obvious. So, the only thing that puts tech out is if ethics is out. The only thing that can get tech in is ethics.” — L. Ron Hubbard, August 2, 1966
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“Recruits are not the answer, not the total why to no production. Lots there already. Training and hats are needed. 2.5 hours a day study time. Part time Crew Cse Super and properly programmed crew students properly enrolled and properly mustered at suitable times will improve things faster than new recruits. Recruits are longer range.” — The Commodore, August 2, 1971
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“I was born a Jew, migrated to the UK, did Scientology, got to a glorious state called Clear, was then told I am not Clear, tried to get my money back, had a little legal fight, was declared. And then I actually found my truth through Illuminati. I found a world within a world that changed what I know about the world — I found the power within me and within others which make every single atom in this world seem like a full world, and that everything has a meaning, and if searched well, you can find the meaning yourself. But then I noticed that the Illuminati was also promoting bad things, so I searched again and then I discovered NES — New Era Scientology. NES was founded by a person called Lafayette, who is the reincarnation of Ron Hubbard himself. He continues to expand the betterment of an individual, and he expands the technology that stopped evolving since the 80’s. I am thankful for him as I feel I can have a future and I can go OT and will be able to verify my Clear state. Thank you, and may the good eye of the Illuminati be with you always!”
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1995: The announcement of a WISE (World Institute of Scientology Enterprises) convention was posted to a.r.s this week. It will be held on August 26-27, 1995 at Saint Hill Manor. Speakers are: Mark Shreffler, Klaus Hilgers and Morten Runow, who will hold seminars covering: Marketing, Organizing Board, Finances, Admin Scale, Personnel, and Sales.
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“Massholio is 4 months of winter wasteland followed by a month of sumptuous spring followed by four months of hellish heat and humidity followed by two and half months of fabulous fall weather. There’s definitely room for improvement, Sherb.”
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Full Court Press: What we’re watching at the Underground Bunker
Criminal prosecutions:
— Danny Masterson charged for raping three women: Trial scheduled for October 11, pretrial conference August 17.
— ‘Lafayette Ronald Hubbard’ (a/k/a Justin Craig), aggravated assault, plus drug charges: Last hearing was on January 18, referred to grand jury. Additional charges also referred to grand jury after January 5 assault while in jail.
— Jay and Jeff Spina, Medicare fraud: Jay sentenced to 9 years in prison. Jeff’s sentencing to be scheduled.
— Rizza Islam and other family members, Medi-Cal fraud: Readiness hearing scheduled for August 22 in Los Angeles
— David Gentile, GPB Capital, fraud: Next pretrial conference set for September 19.
Civil litigation:
— Baxter, Baxter, and Paris v. Scientology, alleging labor trafficking: Complaint filed April 28 in Tampa federal court, Scientology moving to compel arbitration. Plaintiffs filing amended complaint on August 2.
— Valerie Haney v. Scientology: Forced to ‘religious arbitration.’ Selection of arbitrators underway. Next court hearing: February 2, 2023.
— Chrissie Bixler et al. v. Scientology and Danny Masterson: Appellate court removes requirement of arbitration on January 19, case remanded back to Superior Court. Stay in place, next status hearing October 25. Scientology petitioning US Supreme Court over appellate ruling.
— Brian Statler Sr v. City of Inglewood: Third amended complaint filed, trial set for December 6.
— Author Steve Cannane defamation trial: New trial ordered after appeals court overturned prior ruling.
— Chiropractors Steve Peyroux and Brent Detelich, stem cell fraud: Lawsuit filed by the FTC and state of Georgia in August, now in discovery phase.
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THE PROSECUTION OF DANNY MASTERSON
We first broke the news of the LAPD’s investigation of Scientology celebrity Danny Masterson on rape allegations in 2017, and we’ve been covering the story every step of the way since then. At this page we’ve collected our most important links, including our four days in Los Angeles covering the preliminary hearing and its ruling, which has Danny facing trial and the potential sentence of 45 years to life in prison.
After the success of their double-Emmy-winning, three-season A&E series ‘Scientology and the Aftermath,’ Leah Remini and Mike Rinder continue the conversation on their podcast, ‘Scientology: Fair Game.’ We’ve created a landing page where you can hear all of the episodes so far.
LEAH REMINI: SCIENTOLOGY AND THE AFTERMATH
An episode-by-episode guide to Leah Remini’s three-season, double-Emmy winning series that changed everything for Scientology watching. Originally aired from 2016 to 2019 on the A&E network, and now on Netflix.
SCIENTOLOGY’S CELEBRITIES, from A to Z
Find your favorite Hubbardite celeb at this index page — or suggest someone to add to the list!
Other links: SCIENTOLOGY BLACK OPS: Tom Cruise and dirty tricks. Scientology’s Ideal Orgs, from one end of the planet to the other. Scientology’s sneaky front groups, spreading the good news about L. Ron Hubbard while pretending to benefit society. Scientology Lit: Books reviewed or excerpted in a weekly series. How many have you read?
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THE WHOLE TRACK
[ONE year ago] Escaping for the second time: Cathy Mullins on forsaking Scientology’s Florida swamp
[TWO years ago] VIDEO LEAK explains how to rope in the unsuspecting: ‘We don’t explain Scientology’
[THREE years ago] Scientology finds a friendly physician to help out in its attack on an effective drug
[FOUR years ago] Colombian roast: Will Scientologists care about David Miscavige’s latest fraud?
[FIVE years ago] Carol Nyburg is back, and she has a Scientology story that will rough you up
[SIX years ago] For Scientology’s most infamous dirty trickster, retirement has a happy ending
[SEVEN years ago] Garcias’ appeal rejected; now the couple faces the real possibility of Scientology arbitration
[EIGHT years ago] Video proof that Scientology makes you a stellar communicator
[NINE years ago] Underground Bunker Night at The TomKat Project — Get Your Tickets Now!
[TEN years ago] Scientology’s Concentration Camp for Its Executives: The Prisoners, Past and Present
[ELEVEN years ago] Scientology Goes Hillbilly; Also, Broke in Ireland and Big in DC
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Bernie Headley (1952-2019) did not see his daughter Stephanie in his final 5,667 days.
Valerie Haney has not seen her mother Lynne in 2,744 days.
Katrina Reyes has not seen her mother Yelena in 3,249 days
Sylvia Wagner DeWall has not seen her brother Randy in 2,799 days.
Brian Sheen has not seen his grandson Leo in 1,789 days.
Geoff Levin has not seen his son Collin and daughter Savannah in 1,680 days.
Christie Collbran has not seen her mother Liz King in 4,985 days.
Clarissa Adams has not seen her parents Walter and Irmin Huber in 2,855 days.
Carol Nyburg has not seen her daughter Nancy in 3,629 days.
Doug Kramer has not seen his parents Linda and Norm in 1,960 days.
Jamie Sorrentini Lugli has not seen her father Irving in 4,433 days.
Quailynn McDaniel has not seen her brother Sean in 3,749 days.
Dylan Gill has not seen his father Russell in 12,315 days.
Melissa Paris has not seen her father Jean-Francois in 8,234 days.
Valeska Paris has not seen her brother Raphael in 4,402 days.
Mirriam Francis has not seen her brother Ben in 3,982 days.
Claudio and Renata Lugli have not seen their son Flavio in 4,244 days.
Sara Goldberg has not seen her daughter Ashley in 3,280 days.
Lori Hodgson has not seen her son Jeremy and daughter Jessica in 2,995 days.
Marie Bilheimer has not seen her mother June in 2,520 days.
Julian Wain has not seen his brother Joseph or mother Susan in 875 days.
Charley Updegrove has not seen his son Toby in 2,050 days.
Joe Reaiche has not seen his daughter Alanna Masterson in 6,601 days
Derek Bloch has not seen his father Darren in 3,750 days.
Cindy Plahuta has not seen her daughter Kara in 4,070 days.
Roger Weller has not seen his daughter Alyssa in 8,925 days.
Claire Headley has not seen her mother Gen in 4,044 days.
Ramana Dienes-Browning has not seen her mother Jancis in 2,400 days.
Mike Rinder has not seen his son Benjamin and daughter Taryn in 6,703 days.
Brian Sheen has not seen his daughter Spring in 2,809 days.
Skip Young has not seen his daughters Megan and Alexis in 3,207 days.
Mary Kahn has not seen her son Sammy in 3,083 days.
Lois Reisdorf has not seen her son Craig in 2,666 days.
Phil and Willie Jones have not seen their son Mike and daughter Emily in 3,161 days.
Mary Jane Barry has not seen her daughter Samantha in 3,415 days.
Kate Bornstein has not seen her daughter Jessica in 14,524 days.
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Posted by Tony Ortega on August 2, 2022 at 07:00
E-mail tips to tonyo94 AT gmail DOT com or follow us on Twitter. We also post updates at our Facebook author page. After every new story we send out an alert to our e-mail list and our FB page.
Our new book with Paulette Cooper, Battlefield Scientology: Exposing L. Ron Hubbard’s dangerous ‘religion’ is now on sale at Amazon in paperback and Kindle formats. Our book about Paulette, The Unbreakable Miss Lovely: How the Church of Scientology tried to destroy Paulette Cooper, is on sale at Amazon in paperback, Kindle, and audiobook versions. We’ve posted photographs of Paulette and scenes from her life at a separate location. Reader Sookie put together a complete index. More information can also be found at the book’s dedicated page.
The Best of the Underground Bunker, 1995-2021 Just starting out here? We’ve picked out the most important stories we’ve covered here at the Underground Bunker (2012-2021), The Village Voice (2008-2012), New Times Los Angeles (1999-2002) and the Phoenix New Times (1995-1999)
Other links: BLOGGING DIANETICS: Reading Scientology’s founding text cover to cover | UP THE BRIDGE: Claire Headley and Bruce Hines train us as Scientologists | GETTING OUR ETHICS IN: Jefferson Hawkins explains Scientology’s system of justice | SCIENTOLOGY MYTHBUSTING: Historian Jon Atack discusses key Scientology concepts | Shelly Miscavige, 15 years gone | The Lisa McPherson story told in real time | The Cathriona White stories | The Leah Remini ‘Knowledge Reports’ | Hear audio of a Scientology excommunication | Scientology’s little day care of horrors | Whatever happened to Steve Fishman? | Felony charges for Scientology’s drug rehab scam | Why Scientology digs bomb-proof vaults in the desert | PZ Myers reads L. Ron Hubbard’s “A History of Man” | Scientology’s Master Spies | The mystery of the richest Scientologist and his wayward sons | Scientology’s shocking mistreatment of the mentally ill | The Underground Bunker’s Official Theme Song | The Underground Bunker FAQ
Watch our short videos that explain Scientology’s controversies in three minutes or less…
Check your whale level at our dedicated page for status updates, or join us at the Underground Bunker’s Facebook discussion group for more frivolity.
Our non-Scientology stories: Robert Burnham Jr., the man who inscribed the universe | Notorious alt-right inspiration Kevin MacDonald and his theories about Jewish DNA | The selling of the “Phoenix Lights” | Astronomer Harlow Shapley‘s FBI file | Sex, spies, and local TV news | Battling Babe-Hounds: Ross Jeffries v. R. Don Steele
Tony Ortega at The Daily Beast
