A South Florida woman known in her community as “Mother Teresa” is accused of running her business as a lucrative Ponzi scheme, defrauding her of nearly $200 million.
Johanna M. Garcia of North Lauderdale allegedly defrauded more than 15,400 investors out of $196 million through her company, MJ Capital Funding LLC. This was reported by NPR on Tuesday.
Established in 2020, MJ Capital promised to connect investors with small businesses through “merchant cash advances,” or MCAs.
Described as “a hard-working woman who is consistent with her priorities.” his company bioGarcia prided herself on being a down-to-earth businesswoman who helped people create wealth — she was even called “Mother Teresa.” [sic] in his community.”
The scam began to unravel in April 2021, when a website accused MJ Capital of running a Ponzi scheme.
Garcia sued the anonymous whistleblower for defamation and continued to raise money from investors until August 2021, when the Securities and Exchange Commission filed a formal complaint against the company.
into document dated August 9The SEC alleges that MJ Capital used investors’ cash to finance “120% to 180% annual “side income,”” while company executives siphoned off investments for personal excursions and luxury goods.
In addition to using new cash injections to appease existing investors, the SEC alleges that MJ Capital used unlicensed brokers and sales agents to sell unregistered securities.
A federal judge responded to the complaint by freezing Garcia’s corporate assets and ordering them to be administered. reception.
While Garcia awaits further investigation, the case against MJ Capital got new fodder last Tuesday when the SEC filed it. second complaint against Pavel Ruiz, a member of the company’s board of directors.
The SEC alleges that Ruiz, 29, “played a significant role in the perpetuation of the Ponzi scheme.”
Armed with a team of about 70 sales agents, Ruiz defrauded more than 5,100 investors of at least $46 million, diverting $7.7 million of that into his personal accounts.
According to the SEC, Ruiz used some of his pocket money to buy luxury cars and crypto assets.
On the day the SEC complaint was released, the U.S. Attorney’s Office for the Southern District of Florida Ruiz charged with conspiracy to commit wire fraud.
It is unclear whether Garcia, who was not named in the federal case, will face similar charges.
If convicted, Ruiz could face up to 20 years in prison.
As of last week, both Garcia and Ruiz reached partial settlements with the SEC, deferring their fines until the end of any criminal proceedings.
It’s Ruiz currently free on a $250,000 bond.
The MJ Capital scandal is the latest in a disturbing series of similar cases, some of which have seen investors defrauded out of hundreds of millions of dollars.
In March of this year, The Post reported on the crackdown on a $300 million Ponzi scheme It ended with the FBI firing In Las Vegas. Last month, the SEC filed complaints against 11 people for their roles sophisticated crypto pyramid scheme targeted retail investors.
