Broward woman pleads guilty for running $200 million Ponzi scheme
Key Points(5)
- Johanna Michely Garcia, 41, from Broward County, Florida, the former CEO of <a href="https://x.com/mjcapitalfundi1">MJ Capital Funding</a>, LLC, pled guilty on July 16 to running a $190.7 million Ponzi scheme.
- She was charged with conspiracy to commit mail and wire fraud.
- Garcia and her associates, including Pavel Ramon Ruiz Hernandez, claimed they were using investor money to provide merchant cash advances (MCAs) to small businesses.
- From October 2020 to August 2021, they solicited money from investors, promising high returns from MCA profits.
- Instead, they made few loans and used new investor funds to pay existing investors, pocketing millions for themselves.
Johanna Michely Garcia, 41, from Broward County, Florida, the former CEO of MJ Capital Funding, LLC, pled guilty on July 16 to running a $190.7 million Ponzi scheme. She was charged with conspiracy to commit mail and wire fraud.
Garcia and her associates, including Pavel Ramon Ruiz Hernandez, claimed they were using investor money to provide merchant cash advances (MCAs) to small businesses.
From October 2020 to August 2021, they solicited money from investors, promising high returns from MCA profits. Instead, they made few loans and used new investor funds to pay existing investors, pocketing millions for themselves. Nearly $90 million of the $200 million raised was lost by investors.
They recruited others to help solicit investments, paying them commissions. MJ Capital Funding listed place of business in Pompano Beach, Florida.
After the FBI and SEC shut down MJ Capital Funding in fall 2021, Garcia, Ruiz Hernandez, and others began a new Ponzi scheme similar to the original. Garcia continued leading this scheme until her arrest and even while in Bureau of Prisons custody. The entities involved in this new fraud included New Beginning Global Funding LLC, New Beginning Capital Funding LLC, Lion Heart Capital Group LLC, GMR Remodeling LLC, and Group Management LLC.
Like the previous scheme, they falsely claimed investor money would fund commercial loans, but it was used to pay off previous investors and support their lifestyles.
Garcia's sentencing is set for September 20, 2024. Judge Jose E. Martinez will decide her sentence.
Ruiz Hernandez was charged in August 2022, pled guilty in April 2023, and was sentenced to 110 months in prison in September 2023, followed by three years of supervised release.
The announcement was made by U.S. Attorney Markenzy Lapointe for the Southern District of Florida and FBI Miami Special Agent in Charge Jeffrey B. Veltri.
