In a landmark decision, New York Attorney General Letitia James has secured a significant court victory against three merchant cash advance companies known for their predatory lending practices. The companies, Richmond Capital Group, Ram Capital Funding, and Viceroy Capital Funding, collectively referred to as the Richmond companies, along with their principals Jonathan Braun, Tzvi Reich, Robert Giardina, and Michelle Gregg, have been found guilty of harming small businesses through exorbitant interest rates and concealed fees.
The lawsuit, filed by the Office of the Attorney General (OAG), alleged that the Richmond companies' merchant cash advances, marketed as short-term, high-interest funding solutions for small businesses, were in reality illegal loans with interest rates that reached the stratosphere.
This isn't the first time the business world has witnessed such predatory practices. Over the years, countless small businesses, often desperate for quick cash to keep their operations afloat, have fallen prey to such lenders. These companies exploit the vulnerabilities of small business owners, offering them a lifeline, only to pull them into a vortex of debt. The Richmond companies' modus operandi is a reminder of why more regulations and oversight are being enacted in the business lending industry across the country.
Attorney General James's statement resonated with the sentiment of many: "Small businesses are the backbone of our economy, and of all the challenges they face to stay open, predatory lenders shouldn’t be one of them.”
The court's decision mandates the Richmond companies to cancel the debt of thousands of small businesses across the nation and reimburse all interest and overcharges, amounting to tens of millions of dollars.
The case against the Richmond companies is a testament to the relentless efforts of Assistant Attorneys General Jack Figura, Dami Obaro, Adam Riff, Christopher L. Filburn, and their team. Their dedication has brought justice to countless small business owners who were ensnared in the Richmond companies' web of deceit.
Link to the Press Release: