Wonder what “blatantly illegal conduct” looks like? Court opinion about how a defendant harmed small businesses offers insights

Small businesses are the engines that drive the American economy and capital is the fuel that propels them forward. So when fast-talking operators target small businesses with deceptive or unfair tactics, the FTC takes action. Following a January 2024 jury trial, a federal court entered a judgment requiring merchant cash advance company owner Jonathan Braun to pay $20.3 million in monetary relief and civil penalties for misleading small businesses and unlawfully seizing their assets. Read on for some staggering examples of what the court described as Braun’s “lack of remorse for his blatantly illegal conduct.”

In 2020, the FTC sued Braun, his company RCG Advances (formerly known as Richmond Capital Group), and four other defendants for deceiving small business owners about how much money they would get and how much they would have to pay back. But it didn’t end there. To strongarm his customers into paying, Braun used unfair collection practices, including threats of physical violence to small business owners who were already struggling to stay afloat.

The lawsuit also alleged that Braun and other defendants made unauthorized withdrawals from consumers’ accounts and required small business owners to sign confessions of judgment as part of their contracts. Those documents supposedly allowed the defendants to head straight to court for an uncontested judgment in case of an alleged default. But Braun and his compatriots unlawfully and unfairly used those confessions of judgment to seize consumers’ personal and business assets in circumstances not allowed by their financing contracts – and certainly not expected by their customers. The other defendants settled with the FTC, resulting in industry bans and monetary relief for small businesses totaling more than $2 million.

How egregious were Braun’s violations of the law? Way egregious. According to the Final Judgment, on multiple occasions, Braun “evidenced complete disregard for how his actions would affect his customers.” For example, Braun bragged to a colleague that he had “over collected 3,200 on the previous 5k deal. LOL.” LOL indeed. 

Braun reserved his harshest vitriol for customers struggling to make payments. According to one recording introduced into evidence, Braun threatened to send a consumer to jail and said he would spit on the person’s “f****** face on visiting day” in prison. Braun also urged the person to drive their car “off a cliff,” calling the customer a  “f***** lowlife,” “loser,” “degenerate,” and “piece of s***.” 

In October 2023, the court entered an order permanently banning Braun from the merchant cash advance business and the debt collection industry. Supporting the court’s conclusion about Braun’s “lack of remorse,” the February 2024 Final Judgment quotes a particularly telling comment Braun made in an email to a related company:

“It’s ok, I’m gonna beat this b**** at his own game, they may be sneaky and shady, but they never thought they’d ever land on a slick m***** f**** like me, I’ll rock his world. . . .  I’m gonna get paid and make yet again another grown man cry.”

The court entered a judgment of $3,421,067 to redress the harm that Braun’s misconduct caused to small businesses. In addition, the court imposed $16,956,000 in civil penalties for Braun’s violations of law, observing:

“The evidence showed that Mr. Braun and his co-defendants, over whom he exercised considerable control and authority, violated the GLB [Gramm-Leach-Bliley] Act 942 times. This extensive misconduct is made all the more egregious by the fact that Mr. Braun boasted about his illegal conduct and treated it as a laughing matter . . . .”

Inflicting substantial injury on small businesses in need of capital? That was no laughing matter to the judge, to the jury, to the FTC, and certainly not to the business owners Braun lied to, overcharged, and intimidated.