New York Attorney General Letitia James announced recently that her office has secured over $4.6 million in restitution for small businesses defrauded by NLS Equipment Finance LLC (NLS EF) and Leasing Expenses Company, LLC (LEC), spinoff companies of the disbanded Northern Leasing Systems. The restitution is a result of lawsuits filed under New York’s anti-fraud Executive Law 63(12), targeting predatory leasing schemes that trapped small businesses in overpriced, non-cancelable credit card processing equipment leases.
“Small businesses are at the heart of communities across our state, and when they are taken advantage of, we all suffer as a result,” said Attorney General James in a press release. “Northern Leasing and the individuals who ran it spent years preying on small businesses with their fraud. They tried to continue these schemes using different names, but we put a stop to that, and now those companies will have to pay back millions of dollars to the small businesses they took advantage of. I will continue to go after anyone who tries to profit off small business owners with predatory and fraudulent schemes.”
In June 2020, AG James won a lawsuit against Northern Leasing and its affiliates, revealing a long-standing pattern of fraud. Northern Leasing targeted small, family-owned businesses such as flower shops and restaurants, locking them into excessive lease agreements for credit card processing equipment that were nearly impossible to cancel. The court found that the company used the judicial system to pursue collections on these leases, despite most customers being out-of-state, and ordered the company to cancel its contracts and dissolve.
However, Northern Leasing’s owners attempted to continue their fraudulent practices by forming new companies, NLS EF and LEC, to maintain the same schemes. In November 2020, AG James sued these new entities and secured a judgment in February 2021 that barred them from continuing these practices.
As a result of AG James’ ongoing efforts, the New York County Supreme Court awarded an additional $2.67 million in restitution on September 25, 2024, bringing the total restitution secured to over $4.6 million for affected small businesses.
This is part of AG James’ broader campaign to protect small businesses from fraud. In 2024 alone, she has sued over 30 lenders for targeting small businesses with fraudulent loans and secured a historic $77 million judgment against companies practicing predatory lending.
This proceeding was managed by the Consumer Frauds and Protection Bureau, part of the Division for Economic Justice, under AG James’ leadership.