Johanna Garcia claimed her merchant cash-progress organization was so beneficial to compact enterprises in Florida that she was like the Catholic saint Mother Teresa.
But to the 15,400 traders who sank $194.1 million into MJ Capital Funding, the financial institution Garcia introduced with her spouse, Pavel Ramon Ruiz Hernandez, it was merely a Ponzi plan, federal investigators say.
Past 7 days, Ruiz Hernandez, 29, of Broward County, was strike with federal wire-fraud costs in Miami. Garcia, who experienced been MJ Capital’s president and chief govt, experienced previously been named in a civil match introduced by the Securities and Exchange Commission, which accused the operation of becoming a blatant fraud.
Messages remaining with attorneys for Ruiz Hernandez and Garcia weren’t straight away returned.
Investigators say the pair launched MJ Money Funding and other related entities in 2020 with the assure that they were being elevating income from buyers to lend to modest organizations in will need of short-term loans. They promised traders returns of 10% a thirty day period or 120% in a 12 months.
The mix of altruism — the company’s web site claimed Garcia, in her energy to enable hardworking persons make income, had been likened in her community to the Albanian nun Mom Teresa, who served the lousy in Kolkata, India, for decades and received the Nobel Peace Prize in advance of staying canonized by Pope Francis — and high returns proved a strike. Inside a 12 months, the venture raised virtually $200 million from countless numbers of investors, the SEC reported.
But federal prosecutors and the SEC say really very little lending at any time occurred. Most of the funds was employed to spend the salespeople who brought in investors and shell out out before buyers in the plan, in accordance to courtroom documents. Thousands and thousands more went into the pockets of the company’s founders, investigators alleged.
Prosecutors say Ruiz Hernandez funneled some $7.7 million into his individual accounts which he employed to acquire luxury cars and devote in cryptocurrencies.
Inevitably, some buyers grew uneasy, and 1 anonymously developed a web page accusing MJ Money of becoming a Ponzi scheme. The enterprise submitted a lawsuit shifting to get the internet site taken down, boasting its company was solely authentic — something investigators say was a bald-confronted lie.
In late 2021, an undercover FBI agent approached MJ Funds posing as an investor to collect evidence, according to courtroom paperwork.
Garcia, who was originally sued by the SEC past yr, has partly settled the scenario, agreeing to flip above belongings for auction. She has not been billed criminally.
Ruiz Hernandez faces up to 20 years in jail if convicted of wire fraud expenses. He was launched previous week on $250,000 bond.
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