“No Upfront Fees” and a Threat to Break His Jaw: Inside a Small-Business Funding Scheme

RCG Advances, LLC, formerly known as Richmond Capital Group and also doing business as Viceroy Capital Funding and Ram Capital Funding, marketed itself to small businesses as a fast source of funding, advertised with the promise of “no upfront fees.” According to the Federal Trade Commission, the reality behind that pitch included large hidden fees deducted before funds ever reached a business, threats of physical violence against owners who fell behind on payments, and a contract mechanism that allowed the company to seize personal and business assets far beyond what a legitimate default would justify.DOCUMENTED

A federal jury found Jonathan Braun, who controlled RCG Advances, liable for violating the Gramm-Leach-Bliley Act, and a court entered a $20.3 million judgment against him in February 2024 — the first jury trial the FTC has ever conducted.DOCUMENTED

What the complaint alleges

According to the FTC, RCG Advances and its operators misrepresented the terms of the merchant cash advances they provided to small businesses since at least 2015, advertising “no upfront fees” while, according to the complaint, deducting large, undisclosed fees before businesses ever received their funding — leaving them with thousands of dollars less than what they had been promised.DOCUMENTED The complaint further alleges the defendants made unauthorized withdrawals from consumers' bank accounts and used unfair collection tactics, including threats of physical violence, to compel payment.DOCUMENTED

Confessions of judgment as a seizure tool

Central to the complaint's allegations was the defendants' use of confessions of judgment — contract terms businesses signed at the outset that allowed the company to go directly to court and obtain an uncontested judgment against a business the moment it was alleged to have defaulted, without any opportunity for the business to contest the claim beforehand.DOCUMENTED The FTC alleges the defendants illegally and unfairly weaponized these clauses, seizing consumers' personal and business assets in circumstances the underlying financing contracts never actually permitted, converting a routine funding dispute into an immediate, one-sided asset seizure.REVIEWED

The threats documented in the case

The FTC's public description of the case includes specific, documented threats collectors made to small business owners who fell behind: one man was told the company would “break his jaw” if he did not make his payments, while another was threatened with a false accusation of being a child molester if he did not pay.DOCUMENTED Samuel Levine, Director of the FTC's Bureau of Consumer Protection, said Braun and his company “targeted small business consumers with an egregious array of tactics, from predatory contract terms to violent threats,” calling the court's ruling “a significant win on their behalf.”DOCUMENTED

Why this became the FTC's first jury trial

Most FTC consumer protection cases resolve through negotiated settlements or bench rulings rather than jury trials, since defendants and the agency typically reach a settlement well before trial becomes necessary. Braun's case proceeded to an actual jury, which found in January 2024 that he knowingly violated the Gramm-Leach-Bliley Act by deceiving small businesses about the funding amounts RCG Advances would provide and collect.DOCUMENTED The jury's finding directly supported the $3.4 million redress judgment, while the court separately imposed close to $17 million in civil penalties, citing what it described as Braun's “utter disregard and contempt” for the small business owners the scheme targeted.DOCUMENTED

Terms of the judgment

The court's February 2024 judgment requires Braun to pay $20.3 million total, combining $3,421,067 in monetary relief for affected small businesses with $16,956,000 in civil penalties.DOCUMENTED An earlier October 2023 summary judgment had already permanently banned Braun from the merchant cash advance and debt collection industries, with the February 2024 judgment resolving the remaining question of the specific financial penalty.DOCUMENTED Braun's co-defendants, RCG Advances and Robert Giardina, along with Ram Capital Funding and Tzvi Reich, had previously settled separately, with more than $2.7 million already returned to affected small businesses.DOCUMENTED

One small business owner behind on payments was told the company would “break his jaw.” Another was threatened with a false accusation of a serious crime if he didn't pay.

Why the case matters

For small business owners considering merchant cash advance funding, the RCG Advances case is a reminder to read any confession of judgment clause with particular care before signing, since this contract feature can allow a lender to obtain an immediate, uncontested court judgment against a business with no opportunity to dispute the underlying claim — and that threats of violence or false criminal accusations from any collector, however the underlying debt is structured, are illegal regardless of what a business may actually owe. Consulting an attorney before signing any financing agreement containing this specific clause remains a reasonable precaution for any small business owner. The cost of that review is minor compared to the risk of an unexpected asset seizure down the road. Small businesses operating on tight margins are especially poorly positioned to absorb the kind of sudden, uncontested seizure this case describes. A brief legal review before signing remains far cheaper than contesting a seizure after the fact. Owners who skip that step are trusting a lender's good faith with far more than a signature alone should require. That review is a small price to pay against the possibility of losing far more than the business ever actually owed. Every clause matters.

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