In a major victory for small businesses, New York Attorney General Letitia James announced yesterday a major $77 million judgment against three merchant cash advance companies: Richmond Capital Group, Ram Capital Funding, and Viceroy Capital Funding. The companies and their principals, Jonathan Braun, Tzvi Reich, Robert Giardina, and Michelle Gregg, were accused of usury and fraud for illegally high-interest, short-term loans and undisclosed fees, disguised as merchant cash advances, the lawsuit claimed.
"These predatory lenders preyed on small businesses, trapping them in a cycle of debt with sky-high interest rates and hidden fees," Attorney General James said. "This judgment sends a clear message that we will not tolerate these abusive practices in New York."
The judgment requires the companies to stop collecting on their outstanding debt and to repay thousands of small businesses the unfair interest they had to pay. It also prohibits the companies from doing business in New York for five years.
"This is a huge win for small businesses across New York," said John Whelan, president of the National Federation of Independent Business in New York. "These predatory lenders have been a scourge on our communities, and Attorney General James has taken a strong stand to protect them."
The lawsuit against the companies was filed in 2020. The companies were accused of charging interest rates of up to 260% on their loans, far exceeding the legal limit in New York. They were also accused of hiding fees and misrepresenting the terms of their loans, which many would call merchant cash advances.
"These companies were preying on the desperation of small businesses," Attorney General James said. "They knew that these businesses were in need of cash, and they took advantage of them."
Key points:
New York Attorney General Letitia James secured a historic $77 million judgment against three merchant cash advance companies: Richmond Capital Group, Ram Capital Funding, and Viceroy Capital Funding and principals Jonathan Braun, Tzvi Reich, Robert Giardina, and Michelle Gregg.Â
The companies were accused of usury and fraud for illegally high-interest, short-term loans and undisclosed fees.
The judgment requires the companies to stop collecting on their outstanding debt and to repay thousands of small businesses the unfair interest they had to pay.
It also prohibits the companies from doing business in New York for five years.