Lawsuit filed against merchant cash advance companies

Three merchant cash advance companies face legal action from New York Attorney General Letitia James for engaging in unlawful measures while lending money, press release to customers, according to a press release.

The three companies charged are Richmond Capital Group, Ram Capital Funding and Viceroy Capital Funding. They are accused of charging “astronomically high interest rates” on loans, charging undisclosed fees, withdrawing too much from clients’ bank accounts and filing false court affidavits as a means of extorting money judgments. .

It comes after a separate lawsuit filed by the Federal Trade Commission (FTC) last week against the same defendants.

The latest lawsuit was filed in Manhattan Supreme Court on Wednesday last week (June 10) and is the result of an 18-month investigation. There were also four people named in the lawsuit: Richmond and Viceroy owner Robert Giardina and manager Michelle Gregg, Ram Tzvi “Steve” Reich and Jonathan Braun owner, who worked with the other three in operations. cash advances from traders in all companies.

The investigation was spurred by a Bloomberg article outlining the collection methods reported by Braun and his case as a convicted marijuana trafficker.

According to Commercial Observer, James also alleged that companies used violent threats and the threat of legal action to trick customers into paying their debts. In one case, Braun allegedly threatened Bionicle Plumbing owner Michael Pennington, saying his family would have found him “floating in the Hudson” if he had been at home in New York. In another, Braun allegedly threatened the head of a Jewish religious organization to “come down and beat the [expletive] out of you. “

Together, they have collected around $ 77 million in payments on loans with criminally high interest rates since 2015, the lawsuit said, and James said in the statement that it was “unreasonable that these modern loan sharks weren’t there. ‘Not just attacking hard-working business owners with bogus loans, but threatening violence and kidnapping. “

“While small businesses don’t always have the tools to protect themselves from unscrupulous actors, my office is determined to use all the tools at its disposal to protect small businesses from these illegal scammers, and will fight to get every penny back. “James said in The Version.

The scrutiny of merchant loan companies has intensified of late, as the FTC looked at the entire industry last year. The FTC said its concerns were related to the sector’s lack of oversight and potentially unfair contract terms that small and medium-sized enterprises (SMEs) face.

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