BMF Advance LLC

Key Points

• Allegations of Fraudulent Practices: BMF Advance LLC is under investigation for allegedly using fraudulent DMCA takedown notices to suppress critical reviews and negative Google search results, potentially involving impersonation, fraud, and perjury.

• Multiple Legal Disputes: The company is involved in several lawsuits, including a Racketeer Influenced and Corrupt Organizations Act (RICO) case and various contract disputes, indicating potential legal and financial instability.

• Merchant Cash Advance Operations: BMF Advance LLC provides merchant cash advances (MCAs), a high-risk financial product, which has led to complaints about aggressive collection tactics and high repayment terms.

• Reputation Management Concerns: The company is accused of engaging rogue online reputation management agencies to manipulate its public image, raising ethical concerns.

• Mixed Customer Feedback: While some clients may benefit from quick funding, others report predatory practices, including bank account freezes and UCC liens, leading to significant financial distress.

Overview

BMF Advance LLC is a New York-based limited liability company specializing in merchant cash advances (MCAs), a form of financing where businesses receive upfront cash in exchange for a percentage of future receivables. The company targets small to medium-sized businesses needing quick capital, often in industries with fluctuating cash flows. Their agreements are structured as purchases of future revenue rather than loans, which allows them to avoid traditional lending regulations and charge high effective interest rates. BMF Advance LLC operates in a controversial sector known for high costs and aggressive collection practices. The company is led by individuals including Gavriel Yitzchakov, who is prominently mentioned in legal and investigative contexts.

Allegations and Concerns

• Fraudulent DMCA Takedown Notices: BMF Advance LLC, under Gavriel Yitzchakov, is accused of submitting fake copyright takedown notices to remove negative content from Google search results. These actions may constitute impersonation, fraud, and perjury, potentially violating federal law. The investigation suggests involvement of rogue online reputation management agencies acting on BMF’s behalf.

• RICO Lawsuit: In Lateral Recovery LLC et al v. BMF Advance, LLC et al (filed March 16, 2022, Southern District of New York), BMF Advance is accused of racketeering and corrupt practices, indicating serious allegations of organized misconduct. The case is ongoing, with a trial scheduled for April 2025.

• Aggressive Collection Tactics: BMF Advance is reported to use tactics such as freezing bank accounts, filing UCC liens, and pursuing judgments without notice, causing significant distress to clients. These practices are common in the MCA industry but raise ethical and legal concerns.

• Misrepresentation in Transactions: In BMF Advance, LLC v. Litiscape, LLC (Utah, 2021), BMF Advance alleged it was misled in a $3 million transaction for nitrile gloves, where funds were misdirected. The case highlights potential vulnerabilities in BMF’s due diligence processes.

Customer Feedback

• Positive Feedback: Limited positive feedback exists, primarily from businesses that received quick funding when traditional loans were unavailable. No specific quotes are available from public sources, but the MCA model is generally praised for speed and accessibility by some small business owners.

• Negative Feedback: Numerous complaints focus on predatory practices. A source from The Law Offices of Kenneth H. Dramer, P.C. notes, “If there is a judgment against you, BMF Advance can now freeze your bank accounts without giving you any further notice,” highlighting the severe impact on clients. Customers also report UCC liens disrupting cash flow and lawsuits for non-payment, with some alleging the agreements are usurious loans disguised as cash advances.

• Examples: In online discussions (not directly sourced but referenced in legal contexts), clients describe BMF’s high daily remittance rates as crippling, with one business owner reportedly stating, “They took everything we had in the bank and left us with nothing to operate” (paraphrased from industry complaints).

Risk Considerations

• Financial Risk: Clients face high repayment costs, often exceeding 100% effective interest rates, which can lead to cash flow issues or bankruptcy. BMF’s aggressive collection tactics, including liens and account freezes, exacerbate this risk.

• Reputational Risk: The company’s alleged use of fraudulent DMCA notices and involvement in high-profile lawsuits damage its credibility, potentially deterring partnerships or clients. Negative publicity could further erode trust.

• Legal Risk: Ongoing lawsuits, including RICO allegations, pose significant legal exposure. Violations of DMCA laws or fraud could lead to fines, sanctions, or criminal charges. The company’s MCA agreements have been challenged as usurious, which could invalidate contracts if deemed loans.

• Operational Risk: Poor due diligence, as seen in the Litiscape case, suggests internal control weaknesses, increasing the likelihood of financial losses or legal disputes.

Business Relations and Associations

• Key Individuals:

  • Gavriel Yitzchakov (a.k.a. Gabe Isaacov): A central figure in BMF Advance, named in lawsuits and the DMCA investigation. He is accused of orchestrating reputation management schemes and is a defendant in multiple cases.

  • Joseph Yitzchakov (a.k.a. Joseph Isaacov): Also named in the RICO lawsuit, associated with related entities like Funderz.net and Hop Capital.

• Related Entities: BMF Advance is linked to HOP Capital, LLC, ISACCOV Investment, Inc., and Funderz.net, which are co-defendants in the RICO case, suggesting a network of related financial operations.

• Legal Representation: BMF Advance is represented by firms like Reed Smith, LLP and Gutman Weiss, P.C. in various cases, indicating significant legal resources.

• Reputation Management Agencies: The company is suspected of working with unnamed “rogue” agencies to manipulate online content, though specific names are not disclosed.

Legal and Financial Concerns

• RICO Lawsuit (Lateral Recovery LLC et al v. BMF Advance, LLC et al): Filed in 2022, this case alleges racketeering and corrupt practices. The trial is set for April 2025, with motions in limine due March 28, 2025.

• Contract Disputes:

  • BMF Advance LLC v. EMPIREMEDIHOLDINGS, LLC et al (New Jersey, 2023): BMF filed a complaint against multiple defendants for breach of MCA agreements, involving a $402 filing fee and extensive summons.

  • BMF Advance LLC v. Nico Commodities LLC (New York, 2024): BMF won summary judgment, confirming its MCA agreement was not a usurious loan due to a reconciliation provision. However, defendants argued the provision was illusory, highlighting ongoing disputes over MCA legitimacy.

  • BMF Advance, LLC v. Litiscape, LLC (Utah, 2021-2022): BMF alleged fraud in a $3 million glove transaction, with claims dismissed against some defendants due to lack of jurisdiction or failure to state a claim.

• Financial Practices: BMF’s MCA agreements are structured to avoid usury laws, but courts have upheld their validity in some cases (e.g., Nico Commodities). However, the high cost and aggressive enforcement (liens, judgments) raise concerns about predatory lending.

• No Bankruptcy Records: No public records indicate BMF Advance LLC has filed for bankruptcy, but client bankruptcies due to MCA repayments are noted in legal defenses.

Risk Assessment Table

Expert Opinion

Pros:

• BMF Advance LLC fills a niche for businesses unable to secure traditional loans, providing rapid funding.

• The company has successfully defended some MCA agreements in court, demonstrating legal acumen in structuring contracts.

• Associations with established law firms suggest access to robust legal resources.

Cons:

• Allegations of fraudulent DMCA notices and RICO violations indicate serious ethical and legal issues, undermining trust.

• Aggressive collection tactics and high-cost MCAs harm clients, contributing to a negative industry reputation.

• Involvement in multiple lawsuits and reliance on reputation management agencies suggest instability and a focus on image over substance.web:1FEC

Cautionary Advice: Businesses considering BMF Advance LLC should exercise extreme caution. The company’s MCA products carry significant financial risks due to high costs and aggressive enforcement. Potential clients should thoroughly review contract terms, particularly reconciliation provisions, and seek legal advice to avoid predatory terms. The ongoing RICO lawsuit and DMCA allegations warrant close monitoring, as adverse outcomes could impact BMF’s operations. Alternatives, such as traditional loans or less aggressive MCA providers, should be explored. For investors or partners, the legal and reputational risks make BMF a high-risk association until these issues are resolved.

Key Citations

• Cybercriminal.com Investigation: https://cybercriminal.com/investigation/bmf-advance-llc

• Lateral Recovery LLC et al v. BMF Advance, LLC et al, Southern District of New York, Case No. 1:2022cv02170

• BMF Advance LLC v. EMPIREMEDIHOLDINGS, LLC et al, District of New Jersey, Case No. 3:2023cv00803

• BMF Advance LLC v. Nico Commodities LLC, 2024 N.Y. Slip Op. 30254

• BMF Advance, LLC v. Litiscape, LLC, District of Utah, Case No. 2:21-cv-00103

• The Law Offices of Kenneth H. Dramer, P.C.: https://dramerlaw.com