NY Attorney General Files $1.4B Lawsuit Against Predatory Lenders Targeting Small Businesses
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New York Attorney General Letitia James filed a lawsuit against Yellowstone Capital, Delta Bridge Funding, and over 30 other companies and individuals for predatory lending to small businesses. The lawsuit seeks at least $1.4 billion in interest and fees.
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The companies issued fraudulent merchant cash advances disguised as purchases of future revenues but acted as short-term loans with interest rates up to 820% annually.
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The scheme forced businesses like City Bakery to close and exploited New York courts to obtain judgments and seize money from borrowers' bank accounts.
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The lawsuit aims to return all interest and fees, ban the companies and individuals from the industry, and secure a lifetime industry ban for Yellowstone founder David Glass.
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This lawsuit builds on Attorney General James' other recent actions against predatory lenders harming small businesses in New York.