The following e-filed documents, listed by NYSCEF document number (Motion 011) 580, 581, 582, 583, 584, 585, 586, 587, 588, 589, 590, 591, 592, 593, 594, 595, 596, 611, 613, 614, 615, 616, 617, 618, 619, 620, 621, 622, 623, 624, 625, 626, 627, 628, 629, 630, 631, 632, 633, 634, 635, 636, 637, 638, 639, 640, 641, 642, 643, 644, 645, 646, 647, 648, 649, 650, 651, 652, 653, 654, 655, 656, 657, 658, 659, 660, 661, 662, 663, 664, 665, 666, 667, 668, 669, 670, 678, 679, 680, 681, 682, 683, 684, 685, 686, 687, 688, 689, 690, 691 were read on this motion to/for MISCELLANEOUS. The following e-filed documents, listed by NYSCEF document number (Motion 012) 598, 599, 600, 601, 602, 603, 604, 605, 607, 671, 672, 673, 674, 675, 676, 677, 702, 703, 704, 706, 715 were read on this motion to/for JUDGMENT — DEFAULT. The following e-filed documents, listed by NYSCEF document number (Motion 013) 719, 720, 721, 722, 723, 724, 725, 726, 727, 728, 729, 730, 731, 732, 733, 734, 735, 736, 737, 738, 739, 740, 741, 742, 743, 744, 745, 746, 747, 748, 749, 750, 751, 752, 753, 754, 755, 756, 757, 758, 759, 760, 761, 762, 763, 764, 765, 766, 767, 768, 769, 770, 771, 772, 773, 774, 775, 776, 777 were read on this motion to/for INJUNCTION/RESTRAINING ORDER. DECISION + ORDER ON MOTION Upon the foregoing documents (and the supplemental submissions authorized by the Court), following an approximately seven-day hearing, and for the reasons set forth below, the Attorney General of the State of New York (the NY AG)’s amended petition (NYSCEF Doc. No. 426; the AP) is granted as set forth below. Richmond Capital Group, LLC (RCG), Ram Capital Funding, LLC (Ram), Viceroy Capital Funding Inc. d/b/a Viceroy Capital Funding and Viceroy Funding Capital LLC, Robert Giardina, Jonathan Braun, Tzvi Reich, and Michelle Gregg (collectively, the Predatory Lenders) (i) are permanently enjoined from engaging in the fraudulent and illegal practices set forth in the AP, (ii) must cease all collection of payment or other monies related to the Loan Documents (hereinafter defined), (iii) must rescind all Loan Documents between any of the Predatory Lenders and any of the Borrowers (hereinafter defined), (iv) must promptly apply for vacatur of all confessions of judgment filed by them and all judgments issued in their favor in respect of such Loan Documents, (v) must file all papers sufficient to terminate all liens or security interests related to the Loan Documents, (vi) shall provide an accounting and a complete history of all monies collected or received from any Borrower since June 10, 2014,1 (vii) shall pay full restitution and damages which include the refund of all monies paid to the Predatory Lenders or their affiliates pursuant to or in connection with the Loan Documents, and (viii) must each pay $2,000 pursuant to CPLR 8303(a)(6). For the avoidance of doubt, and as discussed below, the remedies of recission and restitution do not include forfeiting principal that was not the property of the Borrowers prior to the time that the Loan Documents were consummated. As discussed more specifically below, on the record before the Court, the NY AG has demonstrated that the Predatory Lenders are loan sharks who perpetrated a massive fraud on desperate merchants (the Borrowers) who were unable to obtain traditional financing for their businesses. The record includes (i) over 140 sample merchant cash advance agreements (each an MCA, and together collectively, the MCAs; each of which MCA contains materially the same terms as the other MCAs), (ii) the business records of Actum Processing LLC (the loan payment processing company; hereinafter, Actum), (iii) certain admissions from the individual Predatory Lenders, (iv) affidavits of certain of the individual Predatory Lenders (which affidavits were submitted at the direction of, or in concert with, other individual Predatory Lenders and without legitimate purpose and in furtherance of the fraud perpetrated by these Predatory Lenders [which affidavits are flatly contradicted by email admissions of the same individuals and other documentary evidence in the record]), and (v) certain affidavits of the Borrowers. The Predatory Lenders, acting in concert with each other (and, for a significant period of time, in fact, working out of the same physical office space right next to each other on the same transactions despite purportedly being part of different companies), also submitted false documents without legitimate purpose to various courts in furtherance of their illicit operation.2 The MCAs Were Loans and Not Legitimate Purchases of Accounts Receivable There are no issues of fact that the MCAs were loans, not a legitimate purchase of accounts receivables (Blue Wolf Capital Fund II, L.P. v. American Stevedoring, Inc., 105 AD3d 178, 182-183 [1st Dept 2013]). The Predatory Lenders made no secret of this. They advertised themselves as lenders making small business loans where “[m]ost loans are completed and money your business account within 48 hours” (NYSCEF Doc. No. 27, at 5). Indeed, according to Ram, “[a]s a private lender, Ram Capital Funding takes pride in investing in projects that traditional banks may deny or may take months to approve…” (NYSCEF Doc. No. 28, at 2). Indeed, the risk of loss associated with ownership of the Borrower’s account receivable never passed to the Predatory Lenders. Pursuant to the MCAs, the Borrowers were required to send bank statements to the Predatory Lenders (see, e.g., NYSCEF Doc. No. 9, at 1). Although the MCAs provided for mandatory reconciliation of the daily amounts collected with the amounts of accounts receivable actually received by the Borrowers following receipt of such bank statements — as if the transactions were sale transactions — this was a total sham (id.). The Predatory Lenders either admit that mandatory reconciliation never occurred or invoke the Fifth Amendment privilege against self-incrimination (tr at 130, lines 17-20 [NYSCEF Doc. No. 456]; tr at 151-152, lines 21-18 [NYSCEF Doc. No. 583]; tr at 43-44, lines 23-2 [NYSCEF Doc. No. 584]; tr at 97, lines 14-18 [NYSCEF Doc. No. 585]).3 The business records of Actum also confirm that it never occurred (NYSCEF Doc. No. 783). These MCAs were always understood to be based on fixed payments over a fixed finite term. Indeed, the text message exchanges between Messrs. Braun and Reich (of RCG and Ram, respectively) confirm that Messrs. Braun and Reich, acting in concert, discussed and made deals based on the amount of time that their money would be outstanding — i.e., a fixed term where the daily payment sweep of the Borrower’s bank accounts reflected fixed constant repayments over a fixed term, not based on any purported amount of receivables purchased (NYSCEF Doc. No. 150). Lastly, although the MCAs indicate that a Borrower’s failure to make payments because it went bankrupt would not constitute a breach of, or default under, the MCAs (provided that no other breach occurred), this too was a sham. The Predatory Lenders made sure that their Borrowers were in default on Day 1 of the MCAs by requiring that the Borrowers falsely represent that the collateral (i.e., the accounts receivable) was free and clear of all other loans (see, e.g., NYSCEF Doc. No. 8, §2.10) and that they would not pledge those assets to others (id., at 6). The Predatory Lenders knew this was false (“NYSCEF Doc. Nos. 136, 699). The Predatory Lenders knew that their money was behind other lenders as to the pledged accounts receivable (NYSCEF Doc. No. 150, at 4 ["I care about 110 days in 5th or 6th"] [emphasis added]). The Addendum to the MCAs also makes clear that a few missed payments constituted a default (see, e.g., NYSCEF Doc. No. 8, at 9 ["NSF Fee Standard --- $50.00 (each) up to THREE TIMES ONLY before a default is declared"] [emphasis in original]; see also NYSCEF Doc. No. 699).4 Additionally, Section 2.9 of the MCAs makes clear that any encumbrance of the collateral would make the full amount immediately due and payable and that the Predatory Lenders could enforce the personal guaranties that they required the Borrowers to provide. Thus, bankruptcy never relieved the Borrowers or the guarantors of their obligation under the MCAs or the guaranties. Inasmuch as missed payments constituted a default (and given that based on missed payments, Mr. Braun called a default and instructed his co-conspirators to file Confessions of Judgment based on such payment defaults against the individual guarantors), it does not matter that the individual guarantors’ guaranty of their business’ MCA was a guaranty of performance and not of payment. The record makes clear that the Predatory Lenders made sure that they were getting repaid no matter what and that the risk of actual ownership of the accounts receivable never passed to the Predatory Lenders. The Loans Were Usurious There are no issues of fact that these Loans were usurious. Indeed, in one case interest of over 3000 percent was charged (NYSCEF Doc. No. 108). There is no evidence in the record that any of the massive fees charged were legitimate, such that these fees must be characterized as interest (which fees and other upfront costs the Predatory Lenders had falsely advertised did not exist).5 But even if the fees and upfront costs were not recharacterized as interest (as they should be), these Loans were criminally usurious by charging interest at a rate far above the legal limit.6 The Predatory Lenders Engaged in Fraudulent and Illicit Conduct There are no issues of fact that the Predatory Lenders engaged in fraudulent and illicit conduct in violation of New York State law. Although the Predatory Lenders’ advertising leaves no doubt that they were lenders, not all of their advertising was true. By way of example, to entice would-be Borrowers to do “business” with them, they indicated that there were “no application fees” and “no upfront costs” (NYSCEF Doc. No. 27, at 3). As indicated above, this was false. The Addendum to the MCAs sets forth a comprehensive fee schedule.7 In addition, the amount actually funded to the Borrowers was not the full amount that was “purchased.” It was also false that there would be a daily sweep of the pledged accounts based on an estimated percentage of collected receivables — the so-called “Specified Percentage.” The MCAs required the Borrowers to deliver bank statements by the eighteenth of every month, and the merchants were required to perform a reconciliation of the amounts collected based on an estimated percentage of accounts receivable and the amounts of accounts receivable actually received (see, e.g., NYSCEF Doc. No. 9, at 1). Monthly reconciliation never occurred. As discussed above, the Predatory Lenders do not deny this (tr at 130, lines 17-20 [NYSCEF Doc. No. 456]; tr at 151, lines 8-13, at 151-152, lines 21-18 [NYSCEF Doc. No. 583]; tr at 43-44, lines 23-2 [NYSCEF Doc. No. 584]; tr at 97, lines 14-18 [NYSCEF Doc. No. 585]), and Actum’s business records confirm this as well (NYSCEF Doc. No. 783). The record also firmly establishes that the daily sweeps of the Borrowers’ accounts were based on a fixed amount and not based on the “Specified Percentage.” Some agreements even left blank the space for a “Specified Percentage” in the form MCA agreement and therefore made no attempt whatsoever to hide the fact that it was a loan requiring fixed payments over a fixed term (see, e.g., NYSCEF Doc. No. 8. at 1). As discussed above, the Predatory Lenders also charged the fees set forth in the Addendum to the MCAs despite advertising on their websites that there were no such fees. More specifically, certain of the fees were provided for in the Addendum as being either a set amount or a percentage of the principal amount advanced so that when the Borrowers signed the MCAs they could not have known how much they would be charged (see, e.g., NYSCEF Doc. No. 8, at 9 ["ACH Program Fee --- $1,999.000 (or 12 percent of the funded amount, depending on size of advance"]). Worse still — even when the fees were stated in the MCAs, the Predatory Lenders often charged fees in excess of the amounts set forth in the MCAs. For example, one Borrower’s MCA listed an ACH fee of $4,999 (NYSCEF Doc. No. 175, at 11), but Mr. Braun instructed Mr. Giardina, his “boss,” to charge an ACH fee of $34,999 (id., at 1). The Predatory Lenders also committed fraud by collecting more from the Borrowers than they were entitled to collect. This overcollection occurred in three ways: (i) by collecting interest payments on holidays when they were not entitled to collect anything,8 (ii) by collecting more than the “Specified Percentages” set forth in the MCAs,9 and (iii) by, on some occasions, debiting interest payments from Borrowers even after the loans were fully repaid.10 The massive fraud perpetrated by the Lenders also included submitting false affidavits to courts in support of Confessions of Judgments that they filed upon a Borrower default based on non-payment. There are no issues of fact as to whether the affidavits were perjurious or done without legitimate purpose. To wit, these affidavits, filed by Messrs. Reich and Giardina and Ms. Gregg, and at the direction of Mr. Braun, knowingly contained false statements about the MCAs, Security Agreements and Guaranties (collectively, the Loan Documents) so that the Predatory Lenders could obtain judgments and collect amounts to which they had no legal right of entitlement as such funds were criminally usurious interest amounts or otherwise fraudulently obtained fees. Among other things, in these perjurious affidavits, the Predatory Lenders falsely claimed that the Borrowers had made payments based on the “Specified Percentage” set forth in the Loan Documents. They had not. The Predatory Lenders had made daily sweeps where these daily sweep payments were not based on a percentage of receivables — i.e., the “Specified Percentage” and where no attempt was made (as required) to reconcile such daily sweeps to ensure that amounts debited from the Borrowers accounts were based on the collected accounts receivable.11 The Loan Documents are Unconscionable The NY AG has also proved that the Loan Documents are procedurally and substantively unconscionable and that there are no issues of fact warranting any further evidentiary’ proceeding. As discussed above, these Borrowers were cash-strapped merchants who were unable to obtain additional traditional financing. The Predatory Lenders’ advertising was directly geared to them — as borrowers who had already been turned down elsewhere (NYSCEF Doc. Nos. 27 and 28). These Borrowers had little to no bargaining power, and the Predatory Lenders knew that and preyed on it. The process was entirely flawed. As discussed above, the relationship was forged based on a series of false representations set forth on the Predatory Lenders’ websites. They advertised themselves as lenders and then required the merchants to execute MCAs in attempt to disguise their usurious loans. The Borrowers knew that these were loans (see, e.g., NYSCEF Doc. No. 92, 8; NYSCEF Doc. No. 98, 3; NYSCEF Doc. No. 105, 3). They expected that there were going to be no upfront fees or charges and that missed payments would not cause a default. All of these representations were false. As discussed above, worse still — the MCAs were fully executed by the Borrowers prior to agreement being reached on all material terms. By way of example, as discussed above, the MCAs provide for payment of an ACH Program Fee in the amount of a certain dollar amount or up to a certain percentage of the amount funded (see, e.g., NYSCEF Doc. No. 8, at 9 ["ACH Program Fee --- $1,999.00 (or 12 percent of the funded amount, depending on the size of the advance)"]). Following execution of these agreements locking in the Borrowers, the Predatory Lenders would have a “funding call” where they would finally disclose the true amount of the fees and disclose the final agreed upon amount that would actually be funded (based on inappropriate fee deduction) which there by increased the interest rate charged to the Borrowers. This often was substantially different than what the Borrowers expected (a $499 stated fee could become as high as $2999 [see, e.g., tr of M.T. Pennington, at 62-63, lines 16-15 (NYSCEF Doc. No. 623)]). As discussed above, these agreements were also substantively unconscionable. The interest rate far exceeded the legal limit of 25 percent for criminal usury (NY Penal §190.40). There Is No Statute of Limitations Bar The claims are not barred by the statute of limitations. Pursuant to CPLR 213(9), the statute of limitations on a case brought by the NY AG pursuant to Executive Law §63(12) is six years. CPLR 213 was amended in 2019 to add subsection 9, and the Appellate Division has determined that this provision applies retroactively (People by James v. JUUL Labs, Inc., 212 AD3d 414, 416-417 [1st Dept 2023]; People by James v. Trump, 217 AD3d 609, 611 [1st Dept 2023]). This case was commenced on June 10, 2020, and the claims are therefore timely as to MCAs entered into as of June 10, 2014. The Borrowers were Harassed and Bullied by Mr. Braun, RCG and Ram but not the other Predatory Lenders Finally, the NY AG has proved that Mr. Braun harassed and bullied the Borrowers. There are no issues of fact that Mr. Braun, without legitimate purpose, and only to collect on his illicit loans and with the intent to harass otherwise, engaged in a course of conduct designed to seriously alarm the Borrowers (NY Penal §240.26[1], [3]). Six Borrowers submitted affidavits explaining that Mr. Braun screamed at them and threatened them and their families with physical violence (NYSCEF Doc. No. 76,
24-27). One Borrower (of Ram) testified that, after he asked for a suspension of payments until customers paid outstanding invoices, Mr. Braun threatened him with violence, including by saying “Be thankful you’re not in New York, because your family would find you floating in the Hudson” (NYSCEF Doc. No. 92, 45). Other Borrowers testified that Mr. Braun similarly harassed and threatened them (NYSCEF Doc. No. 52,
