A recent lawsuit filed by New York Attorney General Letitia James has brought to light the predatory practices of a cash-advance operation, Yellowstone Capital, and its network of related companies. The lawsuit alleges that these entities exploited struggling small businesses by issuing fraudulent loans at exorbitant interest rates, some as high as 820%. Despite purportedly shutting down in 2021 amidst ongoing investigations, the operation continued its activities under the guise of Delta Bridge, continuing to offer illegal loans disguised as merchant cash advances.

One of the businesses affected by this predatory lending was City Bakery, a long-time Manhattan eatery, which was allegedly forced to pay over $2,000 a day, eventually leading to its closure. New York Attorney General Letitia James stated, ‘Small businesses are the foundation of our economy, and they face severe challenges without also having predatory lenders taking advantage of them.’

The lawsuit also names individuals involved in negotiating and servicing these alleged illegal loans, including David Glass, a co-founder of the company who had previously pleaded guilty to insider trading charges. The lawsuit seeks a court order to bar Yellowstone, Delta Bridge, and their affiliates and officials from engaging in such practices.

Efforts to reach out to Yellowstone, Delta Bridge, and the individuals named in the lawsuit for comment were not immediately returned. The former owner of City Bakery, Maury Rubin, also did not respond to requests for comment.