Braun and four other defendants were sued by the FTC for deceiving small businesses and organizations. They were accused of misrepresenting the terms of their merchant cash advances and using unfair collection practices, even resorting to threats of physical violence.
In a groundbreaking move, a federal court has recently issued a judgment against Jonathan Braun, the operator of a merchant cash advance company. As a result of a lawsuit brought by the Federal Trade Commission (FTC), Braun has been ordered to pay a staggering $20.3 million in monetary relief and civil penalties. This marks the first time that the FTC has ever conducted a trial by jury.
The judgment stems from a trial held in January, during which a jury found Braun guilty of knowingly deceiving small businesses through his involvement with RCG Advances, previously known as Richmond Capital Group. Braun violated the Gramm-Leach-Bliley Act by misleading these businesses about the funding they would receive and the amount that would be collected from them. To address the harm caused by Braun's actions, the court has ordered him to pay $3,421,067 in restitution to the affected small businesses.
Furthermore, the court took into account Braun's complete disregard and contempt for consumers. Braun's despicable behavior included hurling vile threats and profanities at small business owners. In light of this, the court has imposed an additional $16,956,000 in civil penalties for Braun's blatant violations of the law.
“I agree with the Court’s assessment regarding the egregiousness and deliberateness of Braun’s extensive lawbreaking,” said Samuel Levine, the Director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to protecting small businesses, and the $20.3 million judgment sends a powerful message that lies and deception will not be tolerated in the marketplace.”
In June 2020, Braun and four other defendants were sued by the FTC for deceiving small businesses and organizations. They were accused of misrepresenting the terms of their merchant cash advances and using unfair collection practices, even resorting to threats of physical violence.
The lawsuit also claimed that unauthorized withdrawals were made from consumers' accounts and businesses were forced to sign confessions of judgment, giving the defendants the power to obtain uncontested judgments in case of default. These confessions of judgment were then used to seize personal and business assets, which went beyond what consumers expected or what was allowed in the financing contracts.
In October 2023, the court issued a summary judgment decision and permanent injunction against Braun. This injunction included a lifetime ban from the merchant cash advance and debt collection industries. The other defendants in the FTC's case had previously settled, resulting in industry bans and monetary relief of over $2 million for small businesses. This judgment serves as a powerful message that such misconduct will not be tolerated.
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