(Bloomberg) -- A loan shark who was freed from prison by Donald Trump in the last days of his presidency has been ordered to repay tens of millions of dollars to thousands of small businesses across the US.
Jonathan Braun, who was serving a 10-year prison term on drug charges when Trump commuted his sentence in January 2021, is among four lenders who were ordered by a New York judge to cease all collection efforts, refund money to customers and provide a judge with a complete accounting of all funds collected over nearly a decade.
The ruling comes in a lawsuit New York Attorney General Letitia James filed in 2020, claiming Braun and others made thousands of illegal loans disguised as “merchant cash advances” to small businesses, charged annualized interest that sometimes exceeded 1,000% and defrauded and harassed borrowers.
The judge referred to Braun and the other defendants as “predatory lenders” and said in his decision that they gave false information in affidavits in the case.
James’s lawsuit targets conduct that occurred before Braun went to prison on the drug charges in January 2020. Citing a Bloomberg Businessweek report and other evidence, James’s office had told the judge that Braun returned to the lending business not long after being released from prison in 2021.
Trump’s White House didn’t mention James’s pending suit against Braun or his lending activities when the drug sentence was commuted. The former president has, however, frequently accused New York’s Attorney General of bringing partisan cases. James sued Trump and his company for $250 million last year in a civil fraud case that’s heading to trial next month.
The Sept. 15 order against Braun applies to three of his associates who were also sued: Tzvi “Steve” Reich, Robert Giardina and Michelle Gregg. All four are principals of affiliated lenders Richmond Capital Group, Ram Capital Funding and Viceroy Capital Funding. Braun allegedly worked closely with the other defendants to lead the companies’ merchant cash advance operations.
“Small business owners were trying to get up on their feet when Richmond Capital crushed them with predatory loans that buried them in harmful debt,” James said Monday in a statement. “Richmond Capital will finally pay the price for the harm it caused for thousands of small businesses nationwide.”
Read More: The Loan Shark Trump Freed From Prison Is Lending Money Again
Lawyers for Braun and the other defendants either declined to comment or didn’t return messages from Bloomberg News. Trump’s spokesman Steven Cheung didn’t immediately respond to a message seeking comment.
Justice Andrew Borrok in Manhattan earlier issued a temporary ban on Braun and anyone working for him from participating in business lending while the case proceeded, saying in a Sept. 1 ruling that “the record firmly establishes irreparable harm.”
The case is New York v. Richmond Cap. Grp. LLC, 451368/2020, New York State Supreme Court (Manhattan).
(Adds comment from judge in fourth paragraph.)
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