MJ Capital Funding CEO Consents to Asset Freeze
September 9, 2021The primary defendant in the MJ Capital Funding case agreed to an extended asset freeze, court records show. Her consent is not an admission of guilt to the civil charges. The SEC has already sufficiently demonstrated its strength of prevailing in the case, which is why the judge ordered the companies be placed into receivership from the outset.
The consent order, entered on the 8th, covers 9 bank accounts held at both Wells Fargo and JPMorgan Chase, in addition to ten credit cards. MJ Capital’s CEO agreed to live off of income derived from two unrelated businesses known as MJ Remodeling and MJ Realty to the tune of $72,800 a year combined. That could change, however, if the SEC determines those businesses are also connected with the alleged scheme. $100,000 that was paid to her lawyer in advance will stand and can be used for her legal defense.
The only unusual bank record disclosed in the papers is a purported account at a small cryptocurrency hedge fund.
Nearly 2,900 people have signed an online petition voicing support for MJ Capital accused’s CEO.
The Receiver is providing regular court filing updates at: https://kttlaw.com/mjcapital/
Iwoca Brings Flexible Repayment Loan Product to Funding Xchange
September 3, 2021
Iwoca, a UK-based small business lender, announced Wednesday that it will be launching a new flexible loan product for online sellers through Funding Xchange. According to Iwoca, they will be the first lender in the UK using “open banking” for revenue-based payments to online businesses on the marketplace.
Small businesses in the UK operating in e-commerce can now apply for revenue-based financing between £1,000- £50,001 through Funding Xchange’s website. The loans will have monthly payments based on the borrower’s revenue, but will also allow businesses to choose repayment options that are based upon their daily ups and downs, allowing the borrower different payment amounts during times of slow business, seasonal disruptions, or other factors that may cause business to halt during certain times of the year.
“Our vision is to provide finance to SMEs when, where and how they need it. We are transforming small business lending through product innovation powered by technology, combined with creative distribution partnerships,” said Christoph Rieche, co-founder and CEO of Iwoca in a company release.
Iwoca has a history of being on the front line of innovation in lending, as they claim to be the first UK company to provide instant credit decisions with Amazon and eBay sellers. The company also claims to be the first company to offer a lending API in their services, while also taking credit for being the first SME lender to connect the 9 largest banks in the UK with open banking.
“Iwoca and Funding XChange are leaders in the use of intelligent technology to make SME funding more accessible, more affordable and more sustainable. By transforming the credit-assessment and cost-to-serve, we deliver targeted, self-serve propositions to underserved segments,” said Katrin Herring, CEO of Funding Xchange in the same release. “Given the challenges that the crisis has created for small businesses, this partnership is delivering critical access to finance to help businesses rebuild and flourish.”
Funding Circle Gets in to Buy-Now-Pay-Later (In UK)
September 2, 2021
Funding Circle is joining one of the trendiest markets in the industry right now, Buy-Now-Pay-Later (BNPL). The company will provide its customers with a way to spread supplier payments or invoice costs over 90 days by providing the capital upfront and allowing the borrower to pay later.
It has been dubbed FlexiPay by the UK-based lender and will enable access to between £3,000 – £50,000 of upfront capital. Loan eligibility will be determined in minutes and the funds will be available almost instantaneously, according to Funding Circle. This combination of small business lending with BNPL services is seemingly unprecedented to the industry.
“We are really excited to be using our market-leading technology to launch FlexiPay, which is designed to support small businesses to manage and control their cash flow,” said Lisa Jacobs, the Europe Managing Director of Funding Circle. “The new product enables businesses to buy now and pay later on any business spend in a way that suits them.”
The payment option will give access to “interest-free” financing to borrowers with a flat fee of 3% per invoice, without any annual charges or setup fees. Access to FlexiPay will not be given to new customers until the end of the year.
According to a source familiar with Funding Circle, the company could possibly bring the FlexiPay concept to the US once they’ve fully rolled it out in the UK.
How the MJ Capital Funding Alleged Ponzi Scheme Played Out in Real Time
August 18, 2021
After the SEC shut down Pompano Beach-based MJ Capital Funding for running what is believed to be a $100M ponzi scheme, more than 2,000 investors are now struggling to figure out what happens next. But in hindsight, could they have known the risks?
Apparently, questions about MJ Capital had been circulating for months. A thread on Reddit with nearly 700 comments is now one of the best preserved insights into the company’s investor community mindset during 2021. There, posters traded anonymous barbs and insults in a spirited debate that challenged the company’s legitimacy. Those that argued it was a ponzi scheme were shouted down with reassurances from people claiming to be paid regularly.
“Scared money makes no money” is a mantra that comes up repeatedly.
The comments are eye-opening in retrospect as posters claim to have invested their life savings or know people that did on the hope that they would make 10% interest on their investment EVERY MONTH. One poster claims that his friend quit his job to promote MJ Capital full time and that he shaved his head, bought a suit, rented an office in Miami “and became some investment f***ing guru even though he could barely explain what the company would do with my money if I gave it to him.”
At least one person said that a friend invested as little as $1,000 into the company, an astonishingly small sum for an operation that is alleged to have raised as much as $129M in little over a year’s time.
Even now with the company’s assets frozen and a receivership in place, some users are wondering if that means their monthly checks will be delayed. Others are confused as to what the SEC lawsuit and temporary restraining order even mean.
“I am out a significant amount of money,” one user wrote. “Literally, my life’s savings. I am scared shitless as I am unaware of what will happen and if I will get my money back. Does anyone know what the odds are for investors who have not received any of their investment back?”
Despite all this, at least one poster thought the SEC’s reference to an undercover FBI operation could work in MJ Capital’s favor since an FBI agent, who posed as an investor, not only made an investment but also got paid.
“Anyone can go to the SEC or FBI to file a complaint about a company to bring them down,” they said. “And of course they are going to look into it. But facts hold up in court. The case file it self says that the [Undercover Agent] made an investment and got paid, proving that the business isn’t a scam and it works. Nothing illegal about what the company does.”
Meanwhile, on instagram, those claiming to be victims have been busy tagging accounts of the people who promoted the investment to hold them accountable. Most of those tagged accounts have already been made private and are not publicly accessible.
To AltFinanceDaily’s knowledge, no criminal charges have been filed against anyone in connection with this case and it remains a civil matter with charges not proven.
Wannabe Business Lender Sentenced to Six Years in Prison
August 11, 2021
Justin Cheng’s website said his company, Celeri Network, could help business owners get a loan between $5,000 and $5 million. Rife with all the familiar lingo commonly found on loan broker websites, Celeri Network gave the appearance of an everyday small business finance company.
Unfortunately for unsuspecting customers, Cheng took his own approach with applicants, telling them that they had to pay upfront refundable “due diligence fees” to help them secure funding. Of course, when the funding never came through, he failed to deliver refunds to the tune of $380,000.
That was only the tip of the iceberg for Cheng who was sentenced to 72 months in prison this week for a litany of schemes including this one.
According to the Department of Justice, “Cheng used the identity of other individuals to submit online applications to the SBA and at least five financial institutions for a total of over $7 million in government-guaranteed loans through the SBA’s PPP and EIDL Program for several companies controlled by CHENG, namely Alchemy Finance, Inc., Alchemy Guarantor LLC d/b/a “Celer Offer,” Celeri Network, Inc., Celeri Treasury LLC, Wynston York LLC, and Neo Bellum Industries Inc.”
Representing also that he had more than 200 employees when he never had more than 14, he successfully secured $2.8M in PPP funding altogether.
“Cheng transferred over $1 million abroad, withdrew approximately $360,000 in cash and/or cashier’s checks, and spent at least approximately $279,000 in PPP loan proceeds on personal expenses,” the DOJ found. “These personal expenses included the purchase of an 18-carat gold Rolex watch for approximately $40,000, rent and move-in fees for a $17,000 per month luxury condominium used by CHENG, approximately $50,000 of furnishings for the condominium, a portion of the purchase of a 2020 S560X4 Mercedes, and purchases totaling approximately $37,000 at Louis Vuitton, Chanel, Burberry, Gucci, Christian Louboutin, and Yves Saint Laurent.”
Far from finished, Cheng also announced the launch of a blockchain-based peer-to-peer lending platform and sold more than $400,000 in digital tokens through “materially false and misleading statements and omissions.”
“Cheng, 25 of New York, New York, pled guilty on April 20, 2021, to one count of major fraud against the United States, one count of bank fraud, one count of securities fraud, and one count of wire fraud,” the DOJ said.
Reliant Funding Announces Steve Kietz as New CEO
August 10, 2021Industry veteran and former Chief Marketing Officer is appointed Chief Executive Officer of the leading alternative finance company
San Diego, CA (August 10, 2021) – Reliant Funding, a leading small business finance company, today announced that it has named Steve Kietz to the role of Chief Executive Officer. Kietz previously served as the firm’s Chief Marketing Officer. The industry veteran will guide Reliant Funding on its mission to continue providing world-class, customized finance solutions for American Small Businesses.
As CMO, Kietz was instrumental in expanding Reliant Funding’s marketing, risk and technology initiatives. He is a seasoned financial services professional with a more than 30-year track record of leading successful teams and is widely recognized as an industry leader in cultivating strategic partnerships. Prior to joining Reliant, Kietz served as President of Inte Q, was Founder and CEO of Mobile Money Ventures (which was acquired by Intuit), and held leading roles at Citi and JP Morgan, including President of Citibank Direct. Outside the profession, Kietz has volunteered as Vice President of the Familial Dysautonomia Foundation for over 30 years.
Commenting on his appointment, Kietz said, “I’m excited and grateful for the opportunity to lead Reliant Funding into a new era, where we are positioned as industry leaders in delivering value to our customers. The company has a long history of providing outstanding financial solutions to small businesses and I am deeply humbled to continue this legacy. I am excited to lead a team of great people and I look forward to continuing to execute our mission.”
Reliant Funding has grown rapidly as it seeks to help small businesses across the country in achieving their financial goals, having provided nearly $2 billion in funding to over 30,000 companies since 2008. The nationally recognized company works to provide tailored financial solutions, regardless of business size. Reliant Funding is owned by Angelo Gordon, a leading global alternative investment firm that provides research-driven investment solutions, driven by their 30+ years of expertise.
Art Peponis, Head of Private Equity at Angelo Gordon, said, “Steve has been instrumental in building Reliant Funding to the leading alternative finance company it is today and has been pivotal in its ability to continue to provide support to small businesses impacted by the devastating COVID-19 pandemic. His decades of expertise, innovative perspective and dedication to our people and small businesses made him the perfect fit as the new CEO of Reliant Funding. We’re confident that he will continue to provide American small businesses with the access to funding they need and the service that assists them in accomplishing their goals. The future is bright for Reliant Funding.”
For more information on Reliant Funding, please click here.
Reliant Funding, headquartered in San Diego, provides customized, short-term funding to small and mid-sized businesses nationwide. For more information, please visit www.reliantfunding.com.
Angelo Gordon, headquartered in New York City, is a global alternative investment company, focused on credit and real estate. For more information, please visit www.angelogordon.com.
Greenbox Capital Acquired Level Up Funding
July 29, 2021
Miami-based Greenbox Capital, a small business finance provider, has acquired Level Up Funding.
Level Up, which focuses on small business lines of credit, was co-founded in 2019 by industry veterans Maciej Bykowski, once the Director of Sales for OnDeck, and Drew Batiato, the former Chief Credit Officer of Idea Financial. Level Up was based in Denver and relocated to Miami, nearby to where Greenbox is.
In an official announcement, Greenbox Capital CEO Jordan Fein, said “We are thrilled to have Level Up Funding join our organization. Their founders and key staff are a wealth of industry knowledge. The acquisition will immediately impact growth and the unique selling proposition that we offer our clients.”
Fein says to expect more such deals in the future:
“We’ll continue to make strategic moves to scale, which includes synergistic acquisitions to further distance ourselves from our competitors,” he said. “Level Up is the first of many to come.”
Bykowski of Level Up said, “Our mission has always been driven by a consumer first perspective. Having a shared vision for the future of alternative lending, we are excited to work together to leverage technology to enhance Greenbox Capital’s product offering and create a seamless customer experience.”
“We’re very excited for our future here at Greenbox. We will have the opportunity to develop new products that will aid clients across the US and abroad with their business growth,” said Level Up’s Drew Batiato.
Update on PAR Funding Case
July 27, 2021
Little has changed in the PAR Funding case since the last update. PAR’s assets are being handily liquidated by the Receiver while the defendants maintain that the Receiver intentionally destroyed a well-run business. Most recently, the defendants have asked the judge to “discharge” the Receiver.
It has been a year since the Philadelphia-based company was suddenly shuttered as word of an SEC case filed under seal became public. Attorneys for the SEC took issue with the way PAR kept its books and how it marketed itself to potential investors. From the start, the defendants strongly disagreed with the plaintiff’s assertions. After an independent Receiver was appointed, the judge has repeatedly deferred to his assessments and PAR’s business has been systematically dismantled in the process.
Anyone can access the ongoing court battle on the Receivership’s official website.
