Yellowstone Capital settles for $1 billion over predatory lending practices By Investing.com

Investing.com – New York Attorney General Letitia James announced a settlement with Yellowstone Capital, a network of 25 lenders accused of predatory practices, for a $1.065 billion judgment against Yellowstone : The company will cancel $534 million in outstanding debts for small businesses, while paying $16.1 million in restitution to affected businesses.

Predatory lending companies, under Yellowstone’s watch, targeted small businesses with illegal high-interest loans. More than 1,100 businesses in New York state and more than 18,000 nationwide were affected :

The remaining $514 million of the judgment will be the liability of the Yellowstone companies.The attorney general’s office accused Yellowstone and its executives of exploiting small businesses with predatory loans, which led to successful companies closing and losing jobs.

The lawsuit against Yellowstone CEO Isaac Stern: (AS:), President Jeffrey Rees and the Yellowstone entities were filed in March 2024. An investigation by the Office of the Attorney General (OAG) found that Yellowstone disguised fraudulent high-interest loans as merchant cash advances are for small businesses that cannot secure loans from traditional banks.

The lawsuit will continue against Delta Bridge Funding and Cloudfund, which took over Yellowstone’s operations in 2021, and against eight others involved in the loan, which includes Yellowstone co-founder David Glass is with five individuals who paid $3.37 million to distribute to affected businesses.These individuals have also been banned from trading to enter the cash industry.

Under the settlement, Yellowstone entities are required to cease all attempts to collect on their loan balances. They must also cease pending enforcement actions, and cease certain liens on small business properties :

Affected small businesses that have a court order or injunction pending against them will receive information by mail on how to request their release within the next six months. Business owners seeking additional information about the settlement can can find it on the OAG website.

The settlement with Yellowstone is the latest action taken by Attorney General James to protect small businesses from fraud.In February 2024, a court judgment of more than $77 million was secured against Richmond Capital Group, Jonathan Brown and their subsidiaries and principals in a similar fraud. for action. In April 2023, two websites that represented the New York State Department and were significantly outnumbered by small business applicants were shut down.

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