Regulators have brought two kinds of cases against merchant cash advance companies: cases that protect the businesses that took the advances, and cases against operators that defrauded the investors who funded them. We verified 18 actions from an official source, 6 of the first kind and 12 of the second.
Key findings
- We verified 18 government actions against merchant cash advance companies and their principals, filed from 2018 to 2026. 6 protected merchants who took advances; 12 targeted companies that defrauded their own investors or only claimed to make advances.
- The merchant-protection cases produced $1.21 billion in announced judgments and settlements ($1.13 billion still standing after an appeal), including $556.3 million in merchant balances canceled.
- The largest: the New York Attorney General's 2025 consent judgment against Yellowstone Capital, $1.065 billion, of which $534.6 million was satisfied by canceling merchants' balances.
- Criminal cases against MCA operators who defrauded investors sentenced 11 people to a combined 98.4 years, with restitution orders of at least $478 million.
- 8 of the 18 actions are still pending, and we found no Federal Trade Commission merchant cash advance case filed after 2020.
Which regulators have acted against merchant cash advance companies?
On the merchant side, the Federal Trade Commission, the New York Attorney General and the New Jersey Attorney General. On the investor side, the Securities and Exchange Commission, federal prosecutors and state securities regulators in Pennsylvania and New Jersey. We found no district attorney usury prosecution and no action against an MCA broker or a business debt relief seller.
Government actions filed, by year
Merchant-protection and investor-fraud actions together.
Cases that protected merchants
These cases alleged that funders took more than their contracts allowed, misrepresented costs and terms, charged rates far above usury limits while calling the deal a purchase, or used confessions of judgment, threats and a captive arbitration forum to collect.
| Filed | Agency | Case | What was alleged | Outcome | Amounts announced | Source |
|---|---|---|---|---|---|---|
| 2026 | New York State Attorney General | People of the State of New York v. Rapid Ruling, Zachary Meyer and Andrew Sachs | Presented as a neutral arbitration forum but built with an MCA company and run on rules it drafted; ruled for the MCA company in nearly all of about 3,000 arbitrations, feeding court judgments against small businesses. | pending | — | Source |
| 2024 | New York State Attorney General | People of the State of New York v. Yellowstone Capital LLC et al. (incl. Delta Bridge Funding / Cloudfund) | MCAs were illegal loans with annual rates up to 820%, plus fraudulent fees; the operation continued as Delta Bridge/Cloudfund from 2021. | settlements (five individuals, 2024) and consent judgment (Yellowstone entities, Stern, Reece, 2025); pending as to remaining defendants | $1.07 billion judgment or settlement; $534.6 million balances canceled; $19.5 million restitution | Source |
| 2020 | New Jersey Office of the Attorney General / Division of Consumer Affairs | New Jersey Attorney General and Division of Consumer Affairs v. Yellowstone Capital LLC et al. | Disguised high-interest loans as receivables purchases, with interest far above New Jersey's usury caps, plus unlawful servicing and collection practices. | settlement (administrative consent order) | $27.4 million judgment or settlement; $21.8 million balances canceled | Source |
| 2020 | Federal Trade Commission (FTC) | FTC v. Yellowstone Capital LLC et al. | Kept withdrawing payments from merchants' bank accounts after balances were paid off and misrepresented fees, collateral and personal-guarantee terms. | settlement (stipulated order for permanent injunction and monetary judgment) | $9.8 million judgment or settlement; $9.8 million restitution | Source |
| 2020 | Federal Trade Commission (FTC) | FTC v. RCG Advances, LLC (f/k/a Richmond Capital Group) et al. | Misrepresented MCA terms and fees, made unauthorized withdrawals, threatened violence, and misused confessions of judgment to seize personal and business assets. | settlements (Ram Capital Funding and Reich, Jan 2022; RCG Advances and Giardina, June 2022) and judgment after summary judgment and the FTC's first jury trial (Braun, Feb 2024) | $23.8 million judgment or settlement; $6.8 million restitution | Source |
| 2020 | New York State Attorney General | People of the State of New York v. Richmond Capital Group LLC et al. | MCAs were disguised loans with annual rates regularly above 200% and often above 1,000%, plus undisclosed fees, threats, and false affidavits used to obtain judgments. | judgment for the State (Sept 2023 summary determination; money judgment entered 2024-04-11); on appeal, liability affirmed and money judgment vacated and remanded (2026-02-19) | $77.3 million judgment or settlement | Source |
Cases against companies that defrauded investors
These cases involved merchant cash advance companies, or schemes that only claimed to make advances, that raised money from investors with false promises. Some also involved threats against merchants to collect.
| Filed | Agency | Case | What was alleged | Outcome | Amounts announced | Source |
|---|---|---|---|---|---|---|
| 2026 | U.S. Securities and Exchange Commission (SEC) | SEC v. Jacob Garfinkel, 5G Funding LLC and Five G Funding LLC | Investment fraud through 5G Funding's merchant cash advance business; about $4.5 million raised from at least 23 investors. | pending | — | Source |
| 2025 | U.S. Securities and Exchange Commission (SEC) | SEC v. Joel J. Natario and Jefferson Scott (a/k/a 'Patch') Baker | Ran a $10 million Ponzi scheme from about 23 investors through a purported MCA venture that never made any MCAs. | pending | — | Source |
| 2025 | U.S. Department of Justice, U.S. Attorney's Office for the Southern District of Florida | United States v. Pablo Silverio Rebollido (E-Card Lending LLC / E-Card Merchant LLC) | Investment Ponzi scheme disguised as an MCA business; more than 70 investors, losses over $40 million. | guilty plea (wire fraud); prison sentence and restitution | $16.0 million restitution | Source |
| 2025 | U.S. Securities and Exchange Commission (SEC) | SEC v. David J. Feingold, Joseph B. Baldassarra, Steven S. Baldassarra, Broad Street Global Management, LLC and Broad Street Inc. | Raised about $1 billion from over a thousand investors and claimed merchant cash advance investments generated significant profits when they did not. | pending | — | Source |
| 2023 | U.S. Department of Justice, U.S. Attorney's Office for the Eastern District of Pennsylvania | United States v. Complete Business Solutions Group, Inc. d/b/a Par Funding, Joseph LaForte, Lisa McElhone, Joseph Cole Barleta and James LaForte | RICO conspiracy, securities and wire fraud against investors who funded Par Funding's MCAs; threats of violence to collect from MCA customers; tax crimes, perjury and obstruction. | guilty pleas and convictions (individuals 2024; company 2026); prison sentences, restitution and forfeiture | $314 million restitution | Source |
| 2022 | U.S. Department of Justice, U.S. Attorney's Office for the Southern District of Florida | United States v. Johanna Michely Garcia (and Pavel Ramon Ruiz Hernandez) | Mail and wire fraud conspiracy in a Ponzi scheme of about $190.7 million that claimed to fund merchant cash advances; investors lost nearly $90 million. | guilty pleas and convictions; prison sentences | — | Source |
| 2021 | U.S. Securities and Exchange Commission (SEC) | SEC v. MJ Capital Funding, LLC, MJ Taxes and More, Inc. and Johanna M. Garcia (plus related SEC actions) | Ponzi scheme pitched as merchant cash advance investments: raised at least $70 million (later described as $196 million) but made at most $2.9 million in MCA loans. | consent judgment (Garcia); asset freeze and receiver; related settlements | $4.1 million judgment or settlement | Source |
| 2020 | U.S. Securities and Exchange Commission (SEC) | SEC v. Complete Business Solutions Group, Inc. d/b/a Par Funding et al. | Raised nearly half a billion dollars from about 1,200 investors through unregistered notes with false statements, to fund small-business advances some charging over 400% interest. | judgments (consent and litigated) against principals and agents; disgorgement affirmed on appeal (2024) | $228.9 million judgment or settlement | Source |
| 2019 | U.S. Department of Justice, U.S. Attorney's Office for the Southern District of Florida | United States v. Carl R. Ruderman and related 1 Global Capital prosecutions | Securities-fraud conspiracy: investors in 1 Global's merchant cash advance business were told of audited financials and double-digit returns while money was diverted. | guilty pleas and convictions; prison sentences | $148 million restitution | Source |
| 2018 | New Jersey Bureau of Securities (Office of the Attorney General) | New Jersey Bureau of Securities cease and desist order against Complete Business Solutions Group (Par Funding) | Sold unregistered securities to fund its small-business cash advances, including more than $8 million to at least 29 New Jersey investors. | administrative cease and desist order (effective immediately) | — | Source |
| 2018 | Pennsylvania Department of Banking and Securities (DoBS) | Pennsylvania Department of Banking and Securities consent order with Complete Business Solutions Group (Par Funding) | Pennsylvania securities-law matter over CBSG's sale of notes used to fund its cash advances (violation details not verified; Pennsylvania order not opened). | consent order | $499,000 judgment or settlement | Source |
| 2018 | U.S. Securities and Exchange Commission (SEC) | SEC v. 1 Global Capital LLC and Carl Ruderman (plus related SEC actions against 1 Global officers) | Florida MCA company raised more than $287 million (later $322 million) from 3,400+ retail investors with false claims about returns and use of funds. | consent judgment (Ruderman); consented settlements by two officers in 2022 (subject to court approval) | $47.0 million judgment or settlement | Source |
What this means for a business that owes $500,000 or more
Most merchant cash advance companies have never been the subject of a government action, and these cases do not show that any other funder broke the law. But if one of your funders appears here, read the order: the Yellowstone settlements canceled merchants' balances and ended collections, and some orders vacated judgments and released liens. The conduct these cases describe, such as debits beyond the contract, refused reconciliations and misstated costs, is worth checking for in your own statements with your attorney. Our court decisions study covers private lawsuits, and our guide to MCA debt over $500,000 explains the options.
Method and limits
- Actions were found in agency newsrooms and court records and are listed only when an official source confirms them; related dockets by the same agency against the same company count as one action. Each row links to its source.
- Amounts are as announced. Judgments are often partly suspended or never fully collected, and civil and criminal amounts overlap, so we do not add them together.
- Two California orders could not be confirmed from the regulator's own site and are not included.
- Nothing here is legal advice.
Questions and answers
Has the government taken action against merchant cash advance companies?
Yes. We verified 18 actions since 2018. 6 protected merchants and produced $1.21 billion in announced judgments and settlements, including $556.3 million in merchant balances canceled.
What did the New York Attorney General's Yellowstone Capital settlement do?
The 2025 consent judgment was for $1.065 billion, of which about $534.6 million was satisfied by canceling merchants' balances; it also banned the settling companies and officers from the merchant cash advance industry.
What should I do if my funder was the subject of a government action?
Read the order or settlement linked on this page; some canceled balances, ended collections or released liens. An attorney can tell you whether it applies to your contract.
Sources
- SEC v. 1 Global Capital LLC and Carl Ruderman (plus related SEC actions against 1 Global officers). sec.gov/enforcement-litigation/litigation-releases/lr-24249
- Pennsylvania Department of Banking and Securities consent order with Complete Business Solutions Group (Par Funding). njoag.gov/new-jersey-bureau-of-securities-orders-philadelphia-based-sm
- New Jersey Bureau of Securities cease and desist order against Complete Business Solutions Group (Par Funding). njoag.gov/new-jersey-bureau-of-securities-orders-philadelphia-based-sm
- United States v. Carl R. Ruderman and related 1 Global Capital prosecutions. justice.gov/usao-sdfl/pr/former-chairman-1-global-sentenced-five-years
- FTC v. RCG Advances, LLC (f/k/a Richmond Capital Group) et al.. ftc.gov/legal-library/browse/cases-proceedings/192-3252-rcg-advances-l
- People of the State of New York v. Richmond Capital Group LLC et al.. nycourts.gov/reporter/3dseries/2026/2026_00990.htm
- SEC v. Complete Business Solutions Group, Inc. d/b/a Par Funding et al.. sec.gov/enforcement-litigation/litigation-releases/lr-24860
- FTC v. Yellowstone Capital LLC et al.. ftc.gov/legal-library/browse/cases-proceedings/182-3202-yellowstone-ca
- New Jersey Attorney General and Division of Consumer Affairs v. Yellowstone Capital LLC et al.. njoag.gov/ag-grewal-files-suit-against-yellowstone-capital-llc-and-ass
- SEC v. MJ Capital Funding, LLC, MJ Taxes and More, Inc. and Johanna M. Garcia (plus related SEC actions). sec.gov/newsroom/press-releases/2021-151
- United States v. Johanna Michely Garcia (and Pavel Ramon Ruiz Hernandez). justice.gov/usao-sdfl/pr/leader-200-million-ponzi-scheme-sentenced-20-
- United States v. Complete Business Solutions Group, Inc. d/b/a Par Funding, Joseph LaForte, Lisa McElhone, Joseph Cole Barleta and James LaForte. justice.gov/usao-edpa/pr/par-funding-principals-charged-securities-fra
- People of the State of New York v. Yellowstone Capital LLC et al. (incl. Delta Bridge Funding / Cloudfund). ag.ny.gov/press-release/2025/attorney-general-james-announces-1-billio
- SEC v. David J. Feingold, Joseph B. Baldassarra, Steven S. Baldassarra, Broad Street Global Management, LLC and Broad Street Inc.. sec.gov/enforcement-litigation/litigation-releases/lr-26289
- United States v. Pablo Silverio Rebollido (E-Card Lending LLC / E-Card Merchant LLC). justice.gov/usao-sdfl/pr/miami-man-sentenced-more-19-years-prison-40-m
- SEC v. Joel J. Natario and Jefferson Scott (a/k/a 'Patch') Baker. sec.gov/enforcement-litigation/litigation-releases/lr-26311
- People of the State of New York v. Rapid Ruling, Zachary Meyer and Andrew Sachs. ag.ny.gov/press-release/2026/attorney-general-james-sues-sham-arbitrat
- SEC v. Jacob Garfinkel, 5G Funding LLC and Five G Funding LLC. sec.gov/enforcement-litigation/litigation-releases/lr-26651
About this study
Built from agency press releases, complaints and court orders. Amounts are as the agencies announced them; a judgment is not money collected, and civil and criminal amounts overlap, so they are reported separately and never added together.
How to cite: Hamilton & Merchant Research, “Government Actions Against Merchant Cash Advance Companies,” October 9, 2026, https://hamiltonmerchant.com/research/mca-enforcement-actions/
Download the data (CSV) · Free to reuse with attribution under CC BY 4.0. Found an error? Email [email protected] and we will correct it and date the change.