According to a press release, three merchant cash advance companies are facing legal action by New York Attorney General Letitia James for engaging in unlawful measures while lending money 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, collecting undisclosed fees, withdrawing too much from clients’ bank accounts and filing forged judicial affidavits as a means of extorting judgments. ‘money.
This follows 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. Four people were also named in the lawsuit: owner of Richmond and Viceroy, Robert Giardina, and manager Michelle Gregg, owner of Ram Tzvi “Steve” Reich and Jonathan Braun, who worked with the other three in operations of 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. ‘attack not only hard-working business owners with bogus loans, but threatened with violence and kidnapping. “
âWhile 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 industry as a whole last year. The FTC said its concerns were related to the industry’s lack of oversight and potentially unfair contract terms that small and medium-sized enterprises (SMEs) face.