Johanna Garcia claimed her merchant funds-advance enterprise was so helpful to tiny organizations in Florida that she was like the Catholic saint Mom Teresa.
But to the 15,400 traders who sank $194.1 million into MJ Capital Funding, the loan provider Garcia launched with her spouse, Pavel Ramon Ruiz Hernandez, it was just a Ponzi scheme, federal investigators say.
Previous 7 days, Ruiz Hernandez, 29, of Broward County, was hit with federal wire-fraud costs in Miami. Garcia, who had been MJ Capital’s president and chief executive, experienced earlier been named in a civil accommodate introduced by the Securities and Trade Commission, which accused the operation of currently being a blatant fraud.
Messages left with attorneys for Ruiz Hernandez and Garcia weren’t immediately returned.
Investigators say the pair launched MJ Cash Funding and other connected entities in 2020 with the promise that they were increasing income from traders to lend to compact companies in require of short-time period financial loans. They promised traders returns of 10% a thirty day period or 120% in a year.
The mix of altruism — the company’s internet site claimed Garcia, in her effort and hard work to enable hardworking men and women make income, experienced been likened in her local community to the Albanian nun Mother Teresa, who served the lousy in Kolkata, India, for decades and gained the Nobel Peace Prize before remaining canonized by Pope Francis — and significant returns proved a hit. Inside of a year, the undertaking lifted nearly $200 million from thousands of traders, the SEC mentioned.
But federal prosecutors and the SEC say very minimal lending at any time transpired. Most of the money was made use of to pay out the salespeople who brought in traders and shell out out before investors in the plan, in accordance to court docket documents. Thousands and thousands much more went into the pockets of the company’s founders, investigators alleged.
Prosecutors say Ruiz Hernandez funneled some $7.7 million into his possess accounts which he utilized to purchase luxurious cars and trucks and commit in cryptocurrencies.
At some point, some traders grew uneasy, and one anonymously made a site accusing MJ Capital of currently being a Ponzi plan. The business filed a lawsuit transferring to get the web-site taken down, claiming its enterprise was solely legitimate — a thing investigators say was a bald-faced lie.
In late 2021, an undercover FBI agent approached MJ Cash posing as an trader to accumulate proof, according to courtroom files.
Garcia, who was to begin with sued by the SEC final year, has partially settled the scenario, agreeing to change about belongings for auction. She has not been billed criminally.
Ruiz Hernandez faces up to 20 decades in prison if convicted of wire fraud expenses. He was launched last week on $250,000 bond.