Business ProfileforRCG Advances LLC

The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

On 6/06/2022, the Federal Trade Commission (FTC) announced that its lawsuit against RCG Advances, LLC and Robert Giardina has led to a court order that permanently bans the company and owner from the merchant cash advance industry for deceiving and threatening small businesses and their owners. The FTC alleged that the scheme’s operators lied to small business owners about terms and fees for their financing, and threatened them with violence when they were unable to pay. In addition, the court ordered RCG Advances and Giardina to make an upfront payment of $1.5 million and subsequent payment of more than $1.2 million to refund consumers.

RCG Advances and Giardina, along with the other defendants in the FTC’s case, operated a merchant cash advance scheme since at least 2015, the agency alleged. Merchant cash advances are a type of alternative small business financing. Generally speaking, merchant cash advance companies provide funds to businesses in exchange for a percentage of the businesses’ revenue, which typically are paid through daily withdrawals from the business’s bank account. 

The FTC’s investigation found that the defendants in the case, including RCG Advances and Giardina, lied to small businesses about numerous elements of the financing agreements before they were signed, and broke the law in their communications with businesses and their owners after the fact. The harms to small businesses and their owners were extensive, including: deceiving consumers about personal guarantees; forcing consumers and businesses into confessions of judgment; providing less funding than promised; threatening consumers and businesses.

Under a court order agreed to by the defendants in order to settle the case, they will be: permanently banned from the business financing and debt collection industries; required to vacate judgments and liens; prohibited from misleading consumers; pay more than $2.7 million which will be used to provide refunds to consumers harmed by their actions.

The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

On 9/15/2023, New York Attorney General Letitia James secured a major court victory against three merchant cash advance companies, Richmond Capital Group, Ram Capital Funding, and Viceroy Capital Funding (the Richmond companies) and their principals, Jonathan Braun, Tzvi Reich, Robert Giardina, and Michelle Gregg, for harming small businesses through high-interest loans and undisclosed fees. The lawsuit filed by the Office of the Attorney General (OAG) alleged that the Richmond companies’ merchant cash advances, which are a form of short-term, high-interest funding for small businesses, were in fact illegal, high-interest loans with astronomical and illegal rates. The court order requires the Richmond companies to cancel the debt owed by thousands of small businesses nationwide and to repay all interest and overcharges collected, totaling tens of millions of dollars.

In June 2020, Attorney General James sued Richmond Capital Group, Ram Capital Funding, and Viceroy Capital Funding for a variety of offenses that were harming small businesses in New York and throughout the nation. Attorney General James found that the Richmond companies were illegally loaning money to small business owners at astronomically-high interest rates, fraudulently charging undisclosed fees, debiting excess amounts from merchants’ bank accounts, and illegally obtaining judgments against merchants by filing false affidavits in New York State courts. In one example, 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. 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 percent — almost 250 times the legal interest rate. 

The court decision requires Richmond Capital to stop collecting on its outstanding debt and to repay thousands of small businesses the unfair interest they had to pay. In order to determine the full amount of restitution, the Richmond Capital is required to provide an accounting and full history of monies collected.

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On February 8, 2023, New York Attorney General Letitia James announced a historic court judgment against three merchant cash advance companies, 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 judgment amount against the Richmond companies is more than $77,298,631, and follows the major court victory Attorney General James secured in September 2023, which included the cancellation of all outstanding debts of the small businesses. The Office of the Attorney General (OAG) 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.

The 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. The decision by Judge Andrew Borrok of the New York State Supreme Court for New York County follows the Richmond companies’ refusal to provide an accounting and full history of monies collected as part of the September 2023 court decision.

https://ag.ny.gov/sites/default/files/2024-02/richmond-companies-judgment.pdf