New York sues cash-advance operation for issuing fraudulent loans with rates as high as 820%
New York Attorney General Letitia James has sued a cash-advance operation based in the state, claiming it exploited struggling small businesses across the country by issuing fraudulent loans
ALBANY, N.Y. (AP) — A New York-based cash-advance operation exploited struggling small businesses across the country by issuing fraudulent, “predatory” loans at interest rates as high as 820%, New York Attorney General Letitia James alleged in a new lawsuit.
James filed the suit Tuesday against Yellowstone Capital, along with a network of related companies and people she says carried on its operations after Yellowstone purportedly shut up shop in 2021 while facing multiple investigations.
The operation, which allegedly rebranded as Delta Bridge, continued issuing illegal loans disguised as merchant cash advances, a form of short-term, high-interest funding for small businesses, the suit charges. One long-time Manhattan eatery, City Bakery, was forking over more than $2,000 a day and eventually shut down as a result, James' office alleges.
“Yellowstone Capital, Delta Bridge, and the other companies pretended to offer a helping hand, but instead provided only illegal, ultra-high-interest loans,” said James in a statement. “Small businesses are the foundation of our economy, and they face severe challenges without also having predatory lenders taking advantage of them.”
