Itria, Biz2Credit “Future Receivables Purchases” RICO Class Action

This class action involves financing provided to businesses by Itria Ventures, LLC and Biz2Credit, Inc. The complaint alleges that the companies offer “future receivables purchases” rather than loans, but that they renege on terms of the financing, charge usurious interest rates, and engage in racketeering.

The class for this action is all persons or entities who borrowed money from Itria Ventures or Biz2Credit using a nominal future receivables sale agreement or similar arrangement, between February 8, 2018 and February 8, 2022, whose funding was treated as a loan by Itria and Bz2Credit who sought repayment under all circumstances, even when the percentage of receivables set forth in the contract is less than the nominal daily amount of repayment.

According to the complaint, Itria, a financial services company, and Biz2Credit, a broker, have overlapping ownership and staffs, share office space, and participate in each other’s affairs.

The plaintiffs in this case are InvenTel.tv, LLC, a direct-response television marketing company, and Yasir Abdul, its CEO. The plaintiffs allege they received loans from Itria that were improperly portrayed as future receivables purchases, in which, the complaint says, “the Customers only need to pay back to Itria from a percentage of Future Receivables and importantly, if there are insufficient Future Receivables the funds do not need to be paid back.”

However, despite provisions in the contracts that state this, the complaint alleges that Itria “deems all funds loaned to be due and payable under all conditions…”

In July 2019, the complaint says, Itria lent InvenTel a first loan of $244,187.50, with $305,000 to be paid back, at the rate of $1,452.38 per day. According to the complaint, this calculates out to an interest rate of 43.29%, “which is well over any reasonable interest rate and fully criminally usurious.”

In September 2019, the complaint alleges, Itria lent InvenTel $244,500, with $305,000 to be paid back at $1,613.76 per day, an interest rate of around 47.79%. The complaint claims Itria required Abdul to personally guarantee both loans.

But InvenTel had a factor, Franklin Capital Holdings, LLC, that had a priority security interest in InvenTel’s assets. The complaint alleges that Itria knew that funds from customers went first to Franklin and not to InvenTel. However, the complaint alleges, Itria insisted on repayments no matter what.

The complaint contends that, since the transactions were loans and the rates of interest were usurious, “they are considered to be unlawful debt under US RICO laws.”

It also alleges Itria took “wrongful, harmful and extortive acts” to try to collect. These included falsely representing itself to get customers of InvenTel to hold back funds that were due to Franklin, the complaint says.

The complaint alleges that Itria pushed false claims even after InvenTel began an Assignment for the Benefit of Creditors. “Currently,” the complaint claims, “Itria is freezing account owned by Abdul in order to secure payment.”

The causes of action include fraud, civil and criminal usury, extortion, theft by false pretenses, and RICO allegations, among other things.

Article Type: Lawsuit
Topic: Loans
Tags: Excessive Interest Rate, Extortion, Fraud, RICO laws