Johanna Michely Garcia, 41, from Broward County, Fla., has been handed a 20-year prison sentence for her involvement in a conspiracy to commit mail and wire fraud. This verdict comes from the U.S. Attorney’s Office, Southern District of Florida. Garcia, who previously served as the CEO of MJ Capital Funding, LLC, was found guilty of the charges.
The U.S. attorney’s office has reported that Garcia was at the helm of a plot involving others, including Pavel Ramon Ruiz Hernandez, in a Ponzi fraud scheme that amounted to around $190,700,000 in investments.
Court records indicate that Garcia’s company, MJ Capital Funding, professed to offer merchant cash advances (MCAs), which are a popular form of short-term financing utilized by small businesses, as per the department.
From October 2020 to August 2021, Garcia and his accomplices engaged in a fraudulent scheme to unlawfully obtain funds from investors under the guise of supporting MJ Capital Funding’s MCA operations, as stated by the department.
Garcia and her team enlisted others to seek investments for MJ Capital Funding, compensating these recruiters with commissions, according to the department.
According to court records, Garcia and her co-conspirators were found to have made false statements and misrepresented the nature of the MJ Capital Funding investment. This includes misleading information about how investor funds were being utilized.
According to the department, Garcia deceived investors by falsely claiming that their funds would be utilized to support MCAs, and that the returns would be derived from the profits of MJ Capital Funding.
The department also reported that the company issued a minimal number of loans and was unable to generate enough profits to fulfill the promised returns.
Instead, Garcia ran a Ponzi scheme, where he used money from new investors to pay off the returns of existing investors. He also misused millions of dollars for his own personal gain, as stated by the department.
Investors faced losses of nearly $90 million out of the total amount raised, which was close to $200 million, as confirmed by the department.
In the fall of 2021, MJ Capital Funding was shut down by the FBI and Securities and Exchange Commission (SEC). Following this, Garcia, Ruiz Hernandez, and several others initiated a comparable Ponzi scheme, as confirmed by the department.
The department stated that Garcia continued to lead the new scheme even after her arrest and while in Bureau of Prisons custody.
