NEW YORK – New York’s Attorney General Office has secured a large court judgment against three merchant cash advance companies.
The decision was handed down against Richmond Capital Group, Ram Capital Funding, and Viceroy Capital Funding (Richmond companies) and their principals, Jonathan Braun, Tzvi Reich, Robert Giardina, and Michelle Gregg, for usury and fraud due to illegally high-interest, short-term loans and undisclosed fees, the AG’s office said.
The judgment amount against the Richmond companies is more than $77,298,631, and follows the court victory the AG’s office secured in September 2023, which included the cancellation of all outstanding debts of the small businesses.
Lawsuit Filed
The Office of the Attorney General said it filed a lawsuit against the Richmond companies for violating multiple state laws, including Executive Law § 63(12), due to their illegal, high-interest loans disguised as merchant cash advances.
In June 2020, the AG’s office sued the Richmond companies for hurting small businesses in New York and throughout the nation. The OAG said its investigation found the Richmond companies were loaning money to small business owners at astronomically high interest rates and over short terms, illegally charging undisclosed fees, debiting excess amounts from merchants’ bank accounts, and fraudulently obtaining judgments against merchants by filing false affidavits in New York state courts.
$10,000 Loan, $20,000 Repayment
“One example presented to the court showed that the Richmond companies loaned $10,000 to a small business and required its owner to pay back $19,900 within 10 days, through daily payments of $1,999,” the AG said. “As a result of the large daily payments and the short, 10-day repayment term, the annual interest rate for the merchant cash advance, including fees, came close to 4,000%— almost 250 times the legal interest rate.”
A September 2023 court decision required the Richmond companies to stop collecting on their outstanding debt and to repay thousands of small businesses the unfair interest they had to pay.
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