Small businesses are the engine that drives the American economy, and capital is the fuel that drives them forward. So when fast-talkers target small businesses with deceptive or unfair tactics, the FTC takes action. Following a jury trial in January 2024, a federal court verdict ordered business cash advance company owner Jonathan Braun to pay $20.3 million in monetary and civil relief for misleading small businesses and unlawfully seizing their assets. fine. Read on for some shocking examples of what the court described as Braun’s “lack of remorse for his blatantly unlawful conduct.”
In 2020, the FTC indicted Braun, his company, RCG Advances (formerly Richmond Capital Group), and four other defendants, accusing them of defrauding small business owners about how much money they would receive and how much they would have to pay back. But it didn’t end there. To force customers to pay, Braun used unfair collection tactics, including threats of physical violence against small business owners who were already struggling to make ends meet.
The lawsuit also accuses Braun and other defendants of making unauthorized withdrawals from consumer accounts and requires small business owners to sign judgments as part of their contracts. The documents purportedly allow defendants to seek an uncontested judgment directly from the court in the event of an alleged breach of contract. But Braun and his compatriots illegally and unfairly used these sentencing depositions to seize consumers’ personal and business assets in circumstances not permitted under their financing contracts and certainly not intended by their clients. Other defendants reached settlements with the FTC that resulted in industrial injunctions and monetary relief for small businesses totaling more than $2 million.
How serious was Braun’s violation? So shocking. Braun repeatedly “demonstrated a complete disregard for how his actions would impact his clients,” according to the final verdict. For example, Braun bragged to a colleague that he had “made $3,200 on a previous $5,000 trade.” Haha. ” Indeed haha.
Braun reserves his harshest criticism for customers who have trouble paying. Braun threatened to send a consumer to jail and said he would spit in the person’s “fucking face” in jail, according to a recording entered into evidence. Braun also urged the man to drive his car “off a cliff,” calling the customer a “fucking lowlife,” a “loser,” a “degenerate” and a “piece of shit.”
In October 2023, the court issued an order permanently banning Braun from participating in the merchant cash advance business and debt collection industry. The final decision in February 2024 supported the court’s conclusion that Braun “lacked remorse,” citing a particularly telling comment Braun made in an email to the company involved:
“It doesn’t matter, I’ll beat this asshole at his own game. They may be cunning and shady, but they never thought they’d meet a cunning asshole.” Like me, I’ll rock his world. . . . I would get paid and make another grown man cry again. “
The court entered a $3,421,067 judgment to redress the harm caused to the small business by Braun’s misconduct. Additionally, the court imposed a civil penalty of $16,956,000 on Braun for his violations, stating:
“The evidence demonstrates that Mr. Braun and his co-defendants exercised considerable control and authority over them in violation of the GLB [Gramm-Leach-Bliley] Acted 942 times. Mr. Braun bragged about his illegal behavior and treated it as a joke, which makes this widespread misconduct all the more egregious. . . ”.
Significant harm to small businesses in need of capital? This is not a funny thing for judges, juries, the FTC, and certainly not for the business owners that Braun lied to, overcharged, and intimidated.
