Archive for 2020
SEC, US Attorney Charge Steven A. Schwartz in 1 Global Capital Case
January 6, 2020
New criminal and civil charges have been filed against an individual in the 1 Global Capital case. This time it’s Steven A. Schwartz, who served as 1 Global’s Director and Chief Operating Officer.
The SEC alleges that Schwartz aided and abetted former CEO Carl Ruderman in carrying out a securities fraud.
The US Attorney for the Southern District of Florida separately alleged that Schwartz engaged in a conspiracy to commit wire fraud and securities fraud.
Schwartz is the third person to be charged criminally in connection with 1 Global Capital’s scheme. Alan Heide and Jan Atlas already pled guilty to their roles in the fraud.
The SEC said of its case against Schwartz:
The complaint further alleges that Schwartz became trustee of a Ruderman family trust in June 2014, and that shortly afterwards, Ruderman had Schwartz execute an agreement conveying ownership of 1 Global to the trust. As alleged, until 1 Global declared bankruptcy in July 2018, Schwartz allowed Ruderman to use the trust to misappropriate several million dollars in investor funds to pay for Ruderman’s luxury lifestyle.
The Scoop Behind The Primary Capital / Infinity Capital Funding Acquisition
January 6, 2020
This morning, Primary Capital announced that it had acquired the merchant cash advance division of Infinity Capital Funding. Infinity, which has been operating from California since 2006, began as an MCA company before expanding to offer small business loans as well. The acquisition will see Infinity’s thirteen years of data, technology, and merchant portfolios pass onto Primary.
Speaking on the acquisition, Primary Capital Managing Member David Korchak said that “anything that you can acquire with that much time behind it and that much experience behind it is excellent, and for us with what we’re trying to do it’s tremendous. It’s a big, massive help for us.”
As well as the intangible assets that will be conferred to Primary, Isaiah Kenigsberg will be joining their team. Having served as Infinity’s Financial Controller, Kenigsberg is now CFO at Primary.
The decision to acquire Infinity’s book came after Primary noticed that it was winding down its MCA operations, Korchak told deBanked. Seeing the value in obtaining such a trove of data proved too enticing to pass the Managing Member said, and Primary has been digging into the information obtained for the last three months.
For Korchak, something that has stood out from this analysis is the patterns that have emerged in the portfolio. “The thing that’s remarkable for these companies that have been around as long as them, is everyone seems to have clients that have taken 30 advances from them. They have clients that started back in ’07, ’08, that are still active merchants which is remarkable.
“The only difficulty is trying to analyze and say, ‘Why is this merchant after 30 different cash advances over a 12-year period still taking cash?’ And that’s really our model. And our goal for this year is to try and help subprime borrowers get out from having to take toxic debt like cash advances for their business. Ultimately, the data that we’re acquiring from ICF and this acquisition is going to help us study a lot of the transitions that MCA merchants have made since the beginning and see which ones have actually been able to get out of it.”
Asked whether there are any more acquisitions in the pipeline, Korchak responded, “Absolutely, we’re heavily data and service-driven for this year specifically, and we have a lot more to come.”
United Capital Source Placed $199M In Deals In 2019
January 5, 2020
United Capital Source, a commercial finance brokerage based in New York, placed 3,883 deals in 2019 for a grand funding total of $199.3 million. Company CEO Jared Weitz said on LinkedIn of the milestone, “Our employees all saw growth (again) this year both professionally and personally. As we come into 2020 we are going into our 10th year of business!!!!! I cannot wait to see what these next year(s) hold for us. I’m so thankful for our Funding Partners and most of all our wonderful staff.”
Weitz is scheduled to speak at deBanked CONNECT MIAMI on January 16th at the Loews Hotel on a panel discussion about how to make money in 2020.
Jonathan Braun Has Checked In To Prison
January 2, 2020
Jon Braun, who Bloomberg Businessweek profiled in a 2018 story series, checked into FCI Otisville on Thursday. He was sentenced to 10 years in prison on May 28th for drug related offenses he committed a decade ago. He was originally scheduled to surrender on August 25th but he successfully delayed the date until today, January 2nd.
I have not attempted to contact Mr. Braun since the day of his sentencing. But purely by chance I shared an elevator with him in the Brooklyn Federal Courthouse on May 28th just mere minutes after he had been handed ten years. Given the opportunity, I asked him how he felt about what just happened.
“I hope it goes by quick,” he replied stoically.
Robocalls Targeted by Trump, Cuomo, Michigan Attorney General
January 2, 2020
In what turned out to be a tough week for illegal robocalls, both the President and New York’s Governor have been behind bills set to combat the invasive form of marketing.
On Tuesday, President Trump signed the TRACED (Telephone Robocall Abuse Criminal Enforcement & Deterrence) Act, bringing into effect legislation first introduced to in November 2018. Aiming to crack down on the number of robocalls received by Americans, TRACED increases the fine faced by robocallers, setting it now in the range of $1,500 to $10,000 if caught. As well as this, the bill pushes for the rollout of call-authentication technology by telecommunication companies to identify ‘spoofed’ numbers and block them accordingly.
Such technology was authorized for use by an FCC vote last June. However while it has since been employed by the likes of T-Mobile and AT&T, the authorization did not guarantee all Americans access to the service, as in some cases it has been offered as a premium feature of more expensive phone plans.
Another detail of TRACED is that it extends the FCC’s period of time to collect fines from illegal robocallers from one year to four, a development that is seen optimistically as a path to increasing the number of charges made. According to the FCC, between 2015 and March of 2018, $208.4 million in fines was collected from illegal robocallers.
Historically, the onus has been on the individual to shield themselves from robocalls, with companies such as Hiya and YouMail offering apps to block them. But with this legislation, moves are being made to compel service providers to better protect their customers, and Governor Cuomo’s bill seeks to take this one step further.
Announced on January 1st, one day after Trump’s signing, Cuomo’s robocall bill is part of his 2020 agenda, titled State of the State. Sharing similarities with TRACED, one of the primary differences between the two bills is that Cuomo’s would require telecommunications companies to block robocalls, pinning them with a fine upon failing to do this.
And making it a hat-trick for anti-robocall legal action this week is Michigan’s Attorney General, Dana Nessel, who set up a Robocall Crackdown Team dedicated to charging those partaking in the criminal activity. “The message we want to send loud and clear is if you are engaged in this kind of illegal activity, we are going to come after you,” said Nessel at a press conference. “And we are going to prosecute you to the fullest extent of the law.”
