In November, Peiffer Wolf and Meyer Wilson revealed that a whistleblower had uncovered GPB Capital’s connections to the Russian mob during a News Conference. This allegation is further explored by Bill Myers and Graham Bippart of Regulatory Compliance Watch. In an article published on December 13, they also dig deeper into how GPB’s executives were working:
“Records obtained by Regulatory Compliance Watch show that some of GPB’s earliest transactions put millions into the pockets of its owners – and the family of an exiled Russian oligarch.
In a series of deals made between May 2013, just after it opened for business, and late winter of 2014, a company owned by a GPB fund acquired full or majority ownership of DJD Holdings and its sister company. The deals totaled nearly $5.2 million, records show.
Both sides of the ball
At the time, that company, variously called GPB LLC and GPB Holdings Automotive LLC in the documents, was owned by auto dealer Jeffrey Lash and GPB Holdings LP, a fund managed by New York financier David Gentile. Gentile is also the sole owner of parent company GPB Capital. And DJD’s owners included—either directly or through parent companies—Gentile and Lash, records show.
DJD’s ownership group also included sisters Rina and Diana Chernaya, daughters of Russian aluminum magnate Michael Cherney, and a company controlled by Cherney called McAnna.
These details were published in two different October 2014 letters written by Lash’s attorney and published as exhibits to a lawsuit Lash filed in 2015 against Volkswagen to protect his upstate New York dealerships.
The letters show that from its earliest days, GPB’s insiders were already profiting off the adviser’s dealings, says Jason Kane, an attorney with Peiffer, Wolfe, whose firm has filed a class-action lawsuit in federal court in Texas alleging that GPB was nothing but an elaborate Ponzi scheme. […] “It’s a major conflict of interest,” he says. “If you are a 65-year-old retiree or a 30-year-old millionaire the fact that the first asset acquired by GPB was from Gentile and his friends is a flashing red light. GPB wasn’t suitable for anybody.”
GPB and Michael Cherney
Michael Cherney’s life is filled with problems. Not only has he had his share of run-ins with the law, but he’s been feuding with other oligarchs as well. The article reveals that “a Spanish judge found some of [the accusations against Cherney] credible enough to issue a warrant for his arrest for money laundering in 2009. Interpol followed with a warrant of its own the following year.”
Cherney lives in exile in Israel. In 2009, a Spanish judge issued a warrant for him on money laundering charges. He has been held in civil contempt in New York and—a rarity for a civil case—been promised with jail time if he ever sets foot there.
Cherney has dismissed the accusations against him, claiming they are fabrications of his old enemies in Russia. But in 2014, a New York judge held—and the Empire State’s Supreme Court would later uphold—that Cherney was using his daughters and several companies, including McAnna, as fronts to hide money from his litigious rivals.
It’s not clear how far back the GPB-Cherney relationship goes. Federal records show that Gentile and other GPB principals were partners with the Chernaya sisters in a firm called RDRD II Holdings, which in turn served as a “promoter” to a now-aborted Irish gambling company, beginning in 2012.
“Cherney was also locked in litigation with some of his former cronies. He sued former protégé Oleg Deripaska—a man whose name has floated at the periphery of President Trump’s Russian scandals—for $6 billion in 2007.
Another rival, Alexander Gliklad, sued Cherney in 2009, alleging that Cherney had bilked him out of his share of the aluminum fortune. The case took six years to litigate before Cherney was ordered to pay more than $505 million.
In the course of that lawsuit, Gliklad also sued Rina and Diana Cherneya, alleging that Cherney was hiding money in the form of loans, gifts and several of their front companies. One of those companies, McAnna LP, is listed as a co-owner of DJD Holdings, according to the letters in the Lash-Volkswagen case.
A New York state court judge awarded Gliklad summary judgment in his case, and the New York Supreme Court rejected the Cherney family’s appeal. Cherney would be held in civil contempt for failing to comply with post-judgment subpoenas and threatened with jail if he ever set foot in New York.”
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