Tag: deceptive/misleading conduct

The Federal Trade Commission has stopped Mission Hills Federal, a student loan debt relief scheme, alleging it bilked more than $23 million from thousands of consumers with false claims that it would service and pay down their student loans. After the FTC filed a complaint seeking to end the deceptive practices, a federal court temporarily halted the scheme and froze its assets. The FTC filed an amended complaint on August 27, 2019, adding Labiba Velazquez as an alleged defendant. On July 20, 2020, the court granted final summary judgment.

In June 2021, the defendants appealed the District Court’s granting of summary judgment. In June 2022, the Ninth Circuit Court of Appeals issued its decision, rejecting the defendants’ arguments and affirmed the District Court’s grant of summary judgment, ruling in favor of the FTC. In March 2024, the FTC sent more than $4.1 million in refunds to consumers harmed by the defendants. 

As a result of a Federal Trade Commission lawsuit, a federal court has temporarily shut down a business opportunity scheme that lured consumers to invest $22 million in online stores, using unfounded claims about income and profits. The operators of Automators also claimed to use artificial intelligence to ensure success and profitability for consumers who agreed to invest with Automators.

In addition to offering consumers high return as “passive investors” in profitable e-stores, Automators, which previously used the names Empire and Onyx Distribution, also offered to teach consumers how to successfully set up and manage e-stores themselves using a “proven system” and the powers of artificial intelligence.

The owners of a money-making scheme that claimed to use artificial intelligence to boost earnings for consumers’ e-commerce storefronts have agreed to surrender millions in assets to settle the FTC’s case against them. In addition, all the businesses and two of their owners face a lifetime ban on selling business opportunities or coaching programs involving ecommerce stores.

The FTC filed a complaint against RCG Advances, LLC—formerly known as Richmond Capital Group, LLC, and also doing business as Viceroy Capital Funding and Ram Capital Funding—and a related entity and individuals. The complaint alleges that, since at least 2015, the defendants have deceived small businesses and other organizations by misrepresenting the terms of merchant cash advances they provided, and then used unfair collection practices, including threatening physical violence, to compel consumers to pay. The FTC also alleges that defendants have made unauthorized withdrawals from consumers’ accounts.

RCG Advances, LLC and Robert Giardina are permanently banned from the merchant cash advance industry for deceiving and threatening small businesses and their owners. In addition, the court ordered RCG Advances and Giardina to make an upfront payment of $1.5 million and subsequent payment of more than $1.2 million to refund consumers.

Jonathan Braun, who controlled small-business funding company RCG Advances, will face a permanent ban from the merchant cash advance and debt collection industries. A federal court issued summary judgment in favor of the FTC in the case along with a permanent injunction against Braun.

As a result of a Federal Trade Commission lawsuit, a federal court has entered a judgment requiring merchant cash advance operator Jonathan Braun to pay $20.3 million in monetary relief and civil penalties.