New York AG Takes MCA Companies to Court for Illegal Lending, Threatening Practices

New York Attorney General Letitia James filed a lawsuit against Richmond Capital Group, Ram Capital Funding and Viceroy Capital Funding seeking to stop the three New York City-based companies and their owners and managers from continuing to cheat small businesses out of millions of dollars each year by selling owners “merchant cash advances,” or fraudulent, “sky-high” interest loans.

James charged the three companies with illegally loaning money to small business owners at “astronomically-high” interest rates, fraudulently charging undisclosed fees, debiting excess amounts from merchants’ bank accounts and obtaining judgments against merchants by filing false affidavits in New York State courts. Additionally, James charged Richmond Capital and Ram Capital with harassing and threatening merchants with violence and legal action in an attempt to force them to pay off the loans. The lawsuit was filed after an 18-month-long investigation and alleges that the companies collected more than $75 million on more than 1,900 fraudulent, illegal loans since 2015.

“Small businesses are the backbone of our economy, so it is unconscionable that these modern-day loan sharks not only preyed on hardworking business owners with fake loans but threatened violence and kidnapping,” James said. “While small businesses may not always have the tools to protect themselves from unscrupulous actors, my office is determined to use every tool at its disposal to protect small businesses from these illegal fraudsters and will fight to get every penny back.”

In addition to charging the three Richmond companies, the lawsuit also charges four of the companies’ principals: Robert Giardina, owner of Richmond and Viceroy; Tzvi (Steve) Reich, owner of Ram; Michelle Gregg, a director of Richmond and Viceroy; and Jonathan Braun, who worked with Giardina, Reich and Gregg to lead the merchant cash advance operations.