Laughing All the Way to Your Bank Account

Jonathan Braun and his company RCG Advances robbed hundreds of small business owners through a double-sided scam: paying them less than promised and taking more than they were owed. A federal court just handed him a $20.3 million bill. Here is exactly how he did it, in his own words.

EvilCorporations.com • Case 20-cv-4432 (JSR), S.D.N.Y., Filed 02/06/24 • 37 min read

The Double-Sided Steal: How the Scam Was Built

Merchant cash advances are supposed to be short-term financing tools for small businesses. Braun turned them into a two-sided extraction machine that took money on the way in and on the way out.

• A merchant cash advance (MCA) works like this: a company fronts a small business a lump sum of cash, and the business repays it through daily automatic withdrawals from their bank account until the agreed total is paid off. The deal is set at signing: here is what you get, here is what we take back.
• Braun’s companies violated that contract on both ends. When funding a deal, they deducted undisclosed upfront fees so businesses received less money than the signed agreement specified. When collecting repayment, they continued withdrawing daily payments after the agreed total had already been reached, pulling thousands of dollars in unauthorized funds.
• Over the five-year period from June 10, 2015 to June 10, 2020, Braun and his co-defendants funded 1,499 deals. A federal economist’s statistical analysis found the most likely underfunding rate was 36.4%, meaning approximately 546 of those deals delivered less cash than promised.
• The same analysis found the most likely over-collection rate was 26.4%, meaning approximately 396 of those 1,499 deals resulted in businesses having more money pulled from their accounts than they legally owed.
• These are concurrent harms. A single small business owner could have their starting capital shorted and then have excess money stripped during repayment. The court found 942 total GLB Act violations across the five-year window.
• Braun’s control over this process was total. He explicitly claimed authority over repayment amounts in a written email, asking co-defendant Tzvi Reich and an employee, “Who is allowed to decide how much a merchant owes other than me.”

The Math of the Theft: What the Court Actually Calculated

Federal economist Dr. Patrick McAlvanah, Bureau of Economics at the FTC, built the statistical case. Braun challenged it in every way he could. He lost every argument.

• Dr. McAlvanah drew a random sample of 87 deals from the 1,499 funded across the five-year window. The court found this sample size statistically valid for extrapolation across the entire population. Braun’s post-trial challenge to the sample size was rejected because he never raised it during the trial itself.
• Within the three-year window (June 10, 2017 to June 10, 2020), Braun and co-defendants were responsible for over-collecting on 247 deals by an average of $9,397 each. Total over-collection: $2,321,059.
• In the same three-year window, Braun and co-defendants underfunded 364 deals by an average of $3,022 each. Total underfunding: $1,100,008.
• Combined consumer harm across the three-year damages window: $3,421,067. This figure is what the court ordered returned to victims as redress, virtually identical to the jury’s recommendation of $3.5 million.
• For civil penalties, the five-year window applies. The court found 942 total violations (396 over-collection deals plus 546 underfunding deals) and set the penalty at $18,000 per violation, landing at $16,956,000.
• The $18,000 per violation figure is a fraction of the legal maximum. At the time of the verdict, the maximum penalty per violation was $50,120 (raised to $51,744 the same day). The court’s figure represents roughly 35 cents on the dollar relative to the legal ceiling.

The Non-Financial Ledger: What the Numbers Cannot Capture

The people Jonathan Braun stole from were not hedge funds or institutional investors. They were small business owners, the kind of person who runs a restaurant or a cleaning company or a repair shop, the kind of person who turns to merchant cash advances precisely because the banks already said no. They needed working capital to make payroll, buy inventory, or keep the lights on. Braun’s companies handed them a contract, told them what they were getting and what they would owe, and then broke both promises simultaneously.

A business that expects $10,000 in funding and receives $7,000 makes decisions based on the wrong number. They might hire a worker they can no longer afford, place an order they cannot float, or sign a lease they cannot sustain. The harm from underfunding is not just the missing $3,000 on day one. It cascades through every decision made on the basis of the lie.

A business owner whose account is being drained each morning has their operating cash stripped in real time. They watch their balance fall and do not understand why. They contact the company. What happens then is documented in Braun’s own emails.

When a consumer wrote in explaining she was owed $11,913.30, Braun’s instruction was a single word: “ignore.” When a borrower sought a payoff letter, Braun said he would provide one and “add some extra to it cause he’s annoying as hell.” That was not a flippant remark. The payoff letter is the document a borrower needs to confirm the debt is satisfied and stop the automatic withdrawals. Inflating it means the borrower keeps paying, keeps losing money, and has a falsified document telling them it is legitimate.

Then there is the phone call. A co-defendant recorded Jonathan Braun on a call with a borrower. What Braun said on that call has been entered as evidence in a federal court, and it reads as follows: he threatened to send the borrower to jail. He said he would spit on the consumer’s “fucking face on visiting day” in prison. He told the borrower to drive his Honda “off a cliff.” He said he hoped the borrower’s wife would leave him. He called the man a “fucking lowlife,” a “loser,” a “degenerate,” and “a piece of shit.”

This was not a collector losing his temper in a heated moment. This was the owner, manager, and officer of the lending company, the man who controlled every deal, the man who decided how much every merchant owed. His co-defendant recorded it. It became a court exhibit. The federal judge described Braun’s treatment of consumers as “completely out of bounds and inappropriate” and cited the call as a direct factor in why the penalty per violation should be higher.

What the $20 million judgment does not restore is what it feels like to be a small business owner who trusted a contract, watched your cash disappear, called the company to find out why, and got threatened with prison and told your wife should leave you. That debt has no line item in the court’s order.

Legal Receipts: Braun’s Own Words, Entered as Federal Evidence

The following quotes are verbatim from court exhibits cited in the court’s Findings of Fact. They were sent or spoken by Jonathan Braun to business associates. The judge cited them repeatedly as evidence of knowledge, intent, and absence of remorse.

“it was 1.99 and i am in profit, i did 999 a day on 10k and cleared 13k already LOL.” Jonathan Braun, email to Stone Funding, March 30, 2017. FTC Exhibit 49-1.

• This email proves Braun was tracking the spread between what he was owed and what he was collecting in real time, and celebrating when the collection exceeded the contract amount. The “LOL” is not incidental; the court specifically cited his tone as evidence of “little remorse.”
• Stone Funding replied: “it’s disgusting…. you’re ruining this guys business and you think it’s funny.” Even Braun’s own business contact recognized the harm and named it explicitly. Braun’s response was to keep going.

“LOL WE ARE OVER 10K ON RAM I SHUT IT OFF, AND INSTEAD OF REFUNDING HIM 10K, ILL GO TO CONTRACT FOR 10K – NET HIM 8K BUT HE OWES A NEW 15K IN 30 PAYMENTS – IM RUNNING RCG, VICEROY, AND RAM DEALS WITH THIS MORON LOL.” Jonathan Braun, email to Stone Funding, November 16, 2017. FTC Exhibit 60-1.

• This is the mechanics of the fraud in a single message. Braun’s company had already over-collected $10,000 from a borrower. The legally correct action was to refund it. Instead, Braun converted the $10,000 he stole into the starting capital for a brand new loan, charging the borrower $15,000 to repay a debt that consisted largely of money already taken from them.
• The phrase “running RCG, VICEROY, AND RAM deals with this moron” confirms Braun was orchestrating multiple entities against a single victim simultaneously, compounding the harm and the liability across corporate structures he controlled.

“we actually are over paid by 6k – so i went to contract, for 10k – held back 2k in fees – and 2k ‘refi’ which he doesnt even owe – and sent his 6k – and lowered daily to 599 instead of 699 – lol.”
Stone Funding replied: “lol omg.”
Braun responded: “FREE RIDE LOL – try and make extra money with no risk lol.” Jonathan Braun, email to Stone Funding, February 12, 2018. FTC Exhibit 62-1.

• Braun openly describes creating a “refi” charge for a debt the borrower “doesnt even owe.” This is fabricating a new financial obligation out of nothing. He describes it as a “FREE RIDE” because the extra money was extracted with no legal basis and no risk to himself.
• The court used the phrase “free ride” as direct evidence that Braun was not acting out of confusion or error. He understood exactly what he was doing and described it to a third party as a benefit to himself.

“a deal was signed at 4,999 then I changed it to 19,999 & 19,999 lol cause I smelled the opportunity it’s extra 30k I gotta do what I gotta do.” Jonathan Braun, email to Stone Funding, March 30, 2018. FTC Exhibit 65-1.

• This email documents Braun unilaterally changing the terms of a signed contract after execution, quadrupling a $4,999 deal to $19,999. The borrower signed at one number; Braun changed it to extract an additional $30,000.
• The phrase “I gotta do what I gotta do” in the context of unauthorized contract alteration is the court’s definition of knowing misconduct. There is no ambiguity about intent.

“lets just leave on forever and over collect lol.” Jonathan Braun, conversation with co-defendant Tzvi Reich, April 26, 2017. FTC Exhibit 50-9.

• This message is the clearest possible evidence that over-collection was a deliberate policy decision, not an administrative error. “Leave on forever” refers to leaving the daily withdrawal mechanism running indefinitely, with no intention to stop when the legal amount was reached.
• This was directed to a co-defendant who participated in executing the scheme. The court found Braun exercised “considerable control” over that co-defendant, making this an operational directive from the person in charge to someone carrying out the fraud.

Timeline: From First Deal to Final Judgment

Eight years of conduct, prosecution, and judgment. The timeline below shows how long the fraud ran before consequences arrived and how long the legal process took once it did.

What Borrowers Were Told vs. What Actually Happened

The Gramm-Leach-Bliley Act violation at the core of this case is about misrepresentation: contracts said one thing, RCG did another. Here is the direct comparison the court documented.

Societal Impact Mapping: The Larger Damage

Public Health

Financial fraud that targets small businesses produces documented downstream harms to individual health and community stability.

• The court’s findings confirm that Braun’s primary targets were small businesses, specifically the operators of those businesses, people running enterprises with thin margins who used MCAs because conventional credit was unavailable to them. Sudden, unauthorized bank withdrawals at the scale documented here, averaging $9,397 in excess collections, can eliminate operating cash and force immediate, cascading decisions: missed payroll, unpaid suppliers, bounced checks across vendors, and potential closure.
• The psychological burden documented in this case goes beyond financial stress. The court found Braun personally threatened a borrower with imprisonment, encouraged suicidal ideation (telling the man to drive “off a cliff”), and wished marital destruction on the man’s wife. This treatment was inflicted on someone in financial distress who had already been robbed. Research consistently links financial predation, especially the combination of unexpected loss and creditor intimidation, to acute and chronic mental health deterioration in victims.
• Small business failure caused by predatory lending removes community anchors: local employers, tax contributors, neighborhood services. The 942 GLB Act violations documented here represent 942 individual small business owners whose financial footing was deliberately compromised. The communities those businesses served have no line in the court’s judgment.

Economic Inequality

Merchant cash advances exist in the gap between mainstream banking and nothing. Braun’s operation exploited a population that could not afford to fight back.

• Small businesses that use MCAs generally do so because they do not qualify for conventional bank loans. They are disproportionately minority-owned, immigrant-owned, and located in lower-income communities. The predatory MCA industry has a well-documented pattern of targeting these businesses specifically because their lack of access to regulated credit makes them captive customers.
• Braun’s double fraud, simultaneously shortchanging the capital delivered and over-extracting during repayment, widened the wealth gap at both ends of the transaction. The business receives less money to work with and loses more money in repayment than legally owed. The net transfer of wealth flows from small operators to Braun’s entities.
• The court’s own findings acknowledge that Braun placed money “with others rather than keeping it in his own name” to shield assets from judgment, a tactic available only to those with legal sophistication and financial networks. The small business owners he defrauded had no equivalent defense. They could not hide their bank accounts from his automatic daily withdrawals.
• The co-defendants, RCG Advances LLC, Ram Capital Funding LLC, Robert Giardina, and Tzvi Reich, settled with the FTC for amounts the court itself acknowledged were less than what Braun alone is now ordered to pay. The corporate structure distributed both the profit from the fraud and the legal exposure in ways that protected the smaller players while concentrating the worst conduct in one individual who then attempted to evade accountability by skipping his own trial.
• The FTC’s ability to seek consumer redress through a reasonable approximation rather than requiring identification of each individual victim was essential to recovering anything for this class of borrowers. The court explicitly noted that demanding proof of each individual’s harm “would be an onerous task with the potential to frustrate the purpose of the FTC’s statutory mandate.” This legal standard exists precisely because financial predators structurally benefit from the difficulty of tracing harm to individual low-income victims.

The Cost of a Life: How a Federal Judge Priced Braun’s Conduct

The numbers inside the judgment carry specific moral weight when translated into what they represent.

The Corporate Web: Who Braun Controlled and How

This was not one man and one company. Braun ran multiple entities simultaneously, and the court found he exercised considerable control over all of them.

What Now? The Watchlist and Your Next Move

Braun is banned and has a judgment against him. The industry he operated in is still running. Here is who to watch and what to do.

The People Accountable

The court’s final judgment holds the following individuals and entities jointly and severally liable for the $3,421,067 consumer redress award, meaning any one of them can be pursued for the full amount:

• Jonathan Braun, owner, manager, and officer of RCG Advances and Ram Capital. Permanent lifetime ban from MCA industry and all debt collection activities. Personal judgment: $20,377,067.
• RCG Advances, LLC (also operating as Richmond Capital), co-defendant. Settled separately on January 8, 2022. (ECF No. 102).
• Robert Giardina, co-defendant. Settled separately on June 2, 2022. (ECF No. 127).
• RAM Capital Funding, LLC, co-defendant. Settled separately on January 8, 2022. (ECF No. 102).
• Tzvi Reich, co-defendant. Settled separately on January 8, 2022. (ECF No. 102).

Watchlist: Regulatory Bodies With Jurisdiction Over This Industry

• Federal Trade Commission (FTC): Filed and won this case. Monitors unfair and deceptive trade practices under the FTC Act. Reports of predatory lending, hidden fees, and unauthorized withdrawals go to ftc.gov/complaint.
• Consumer Financial Protection Bureau (CFPB): Holds authority over many small business lending products and debt collection practices. Accepts complaints at consumerfinance.gov/complaint.
• State Attorneys General: New York State filed a parallel action against Braun resulting in a preliminary injunction. Your state AG may have jurisdiction over MCA operators in your area. Contact your state AG’s consumer protection division directly.
• Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC): If your small business bank account was the vehicle for unauthorized withdrawals, regulatory complaints to these bodies about the bank’s role in processing unauthorized ACH debits may be appropriate.
• U.S. Department of Justice (DOJ): For cases involving money movement structured to obscure fraud proceeds, DOJ has financial crimes jurisdiction separate from the FTC’s civil enforcement authority.

Grassroots and Mutual Aid: Concrete Next Steps

• If you or a small business you know was a customer of RCG Advances, LLC or Ram Capital Funding, LLC between 2015 and 2020: Contact the FTC directly. The court has ordered consumer redress funds. The FTC will administer distribution; your documentation of transactions is necessary to receive it. Keep all MCA agreements, bank statements showing daily withdrawals, and any correspondence with the company.
• Share this judgment with every small business owner in your network who has ever used a merchant cash advance. The industry is largely unregulated and the pattern of underfunding and over-collection documented here is the business model at many MCA companies, not an anomaly. Awareness of what the contract actually guarantees, and what regulators can do when it is violated, is the first layer of defense.
• Connect with small business advocacy organizations in your city or state that specifically track predatory MCA practices. Organizations like the Responsible Business Lending Coalition and state-level small business development centers (SBDCs) provide free guidance on MCA contracts and can flag problematic terms before signing.
• Demand that your elected representatives support federal legislation capping MCA interest-equivalent rates and mandating disclosure of effective annual percentage rates. MCAs are currently exempt from many consumer protection disclosures that apply to conventional loans because they are technically structured as purchases of future receivables, not loans. Closing this loophole is a direct path to reducing the entire predatory MCA industry’s ability to operate.
• If you witness unauthorized daily withdrawals from your business account: Do not wait. Contact your bank immediately to dispute unauthorized ACH transactions, contact the CFPB, and contact your state AG. Document every communication. The pattern in this case shows that companies like RCG rely on borrower confusion and financial desperation to prevent pushback.