A $1.065 billion judgment against Yellowstone Capital, the largest merchant cash advance enforcement action to date
New York Attorney General Letitia James sued Yellowstone Capital LLC and 25 affiliated companies in March 2024, alleging the network, operating since 2009 under dozens of aliases including Fundry, Green Capital Funding and High Speed Capital, disguised illegal loans as merchant cash advances, charging effective interest rates up to 820% a year, debiting fixed daily amounts regardless of revenue, and filing fraudulent confessions of judgment in New York courts. The case settled with a $1.065 billion judgment approved by the court in January 2025, canceling $534,552,724 owed by more than 1,100 New York businesses and over 18,000 nationwide.
- Year
- 2025
- Where
- United States
- Outcome
- Settled
- Reported loss
- $534.6 million
- Victims
- 19,100
- Schemes
- Merchant cash advance fraud
- Last reviewed
- 2026-09-25
The facts, as recorded
- The Attorney General's March 2024 complaint named Yellowstone Capital LLC, founder David Glass, and over 30 affiliated companies and individuals, including Delta Bridge Funding (also doing business as Cloudfund), which the complaint alleges Yellowstone rebranded as after ceasing operations under the Yellowstone name in 2021 during the investigation, using the same personnel and practices.
- The complaint alleges Yellowstone marketed its product as a purchase of future receivables while operating it as a fixed-term loan, charging effective interest rates as high as 820% a year, described as more than 50 times New York's legal lending limit.
- The complaint alleges the company debited fixed daily amounts directly from merchants' bank accounts over 60-to-90-day terms, falsely promised to 'reconcile' payments against actual revenue, and used fraudulent measures to deny merchants the refunds that reconciliation should have produced.
- The complaint alleges Yellowstone filed fraudulent confessions of judgment in New York courts against merchants nationwide, regardless of where the business actually operated.
- One example cited in the settlement announcement: City Bakery, a Manhattan eatery that had operated for nearly 30 years and employed 30 to 50 staff, paid Yellowstone more than $2,000 a day before closing in 2019.
- The settlement, submitted to the court in December 2024 and approved January 16, 2025, entered a $1.065 billion judgment: the companies and named officers paid $16.1 million immediately for distribution to affected small businesses, and remain liable for the remaining roughly $514 million if settlement terms are violated; the judgment also canceled $534,552,724 in outstanding amounts owed by over 1,100 New York businesses and more than 18,000 nationwide, dismissed pending collection lawsuits, vacated existing judgments across multiple New York counties, and permanently barred Yellowstone's named executives, including CEO Isaac Stern and President Jeffrey Reece, from the merchant cash advance business.
- Attorney General Letitia James said: "Yellowstone and its executives lined their pockets at the expense of vulnerable small businesses who turned to them for help."
Why this case matters
This is the largest merchant cash advance enforcement action documented anywhere on this page, a $1.065 billion judgment and the industry’s largest debt-cancellation order to date, covering more small businesses than any other case here by a wide margin: over 19,100 nationwide.
A company that rebranded mid-investigation
The complaint alleges Yellowstone didn’t stop operating when investigated; it ceased using the Yellowstone name in 2021 and continued the same practices under Delta Bridge Funding, also doing business as Cloudfund, with the same personnel. That pattern is a documented reason regulators structure relief to include a permanent industry ban on named individuals, not just a monetary judgment against a company name that can be discarded.
What “820% a year” looked like for one business
City Bakery, a Manhattan eatery that had operated for nearly 30 years, paid Yellowstone more than $2,000 a day, according to the Attorney General’s announcement, before closing in 2019. The daily-debit structure this scheme’s page describes is not an abstraction in that example; it is a fixed, dollar-figure drain on a business’s daily cash flow, independent of whether that day’s sales covered it.
The scale of the relief
Most of the $1.065 billion judgment is debt cancellation, not cash paid out: $534,552,724 owed by over 19,100 small businesses was wiped out, on top of an immediate $16.1 million cash distribution. That mix, mostly canceled debt rather than refunded cash, reflects that the harm here was ongoing collection against businesses that, in many cases, had already closed or were still fighting to survive it.
The caveat
This case was resolved through a settlement approved by the court, not a trial verdict, so the specific factual allegations in the Attorney General’s complaint were not tested against Yellowstone or its executives at trial. The settlement requires the defendants to stop the conduct described and pay the agreed relief; it does not, per the sources reviewed for this page, state that the named executives admitted the specific allegations as a condition of settling.
Sources
- Attorney General James Sues Large-Scale Predatory Lending Operation Targeting Small Businesses. Office of the New York State Attorney General. Accessed 2026-09-25. Supports: The March 2024 lawsuit's filing, the defendant and alias list, the 820% effective interest rate allegation, the disguised-loan allegation, the fraudulent confessions of judgment, the 2009 start date, and the Delta Bridge/Cloudfund rebrand allegation.
- Attorney General James Announces $1 Billion Settlement With Predatory Lender. Office of the New York State Attorney General. Accessed 2026-09-25. Supports: The $1.065 billion judgment, the $534,552,724 in canceled debt, the number of businesses affected in New York and nationwide, the named executives, the immediate $16.1 million payment, the City Bakery example, and the Attorney General James quote.
- Settlement with Yellowstone Capital regarding MCAs. Office of the New York State Attorney General. Accessed 2026-09-25. Supports: The list of 25 affiliated Yellowstone entities, the settlement approval and claim-deadline timeline, and the relief terms including debt cancellation, dismissal of pending lawsuits, and termination of UCC liens.