Johanna Garcia claimed her merchant dollars-advance organization was so useful to compact companies in Florida that she was like the Catholic saint Mother Teresa.
But to the 15,400 buyers who sank $194.1 million into MJ Capital Funding, the loan company Garcia launched with her associate, Pavel Ramon Ruiz Hernandez, it was merely a Ponzi plan, federal investigators say.
Last 7 days, Ruiz Hernandez, 29, of Broward County, was hit with federal wire-fraud costs in Miami. Garcia, who experienced been MJ Capital’s president and chief govt, experienced earlier been named in a civil fit brought by the Securities and Exchange Commission, which accused the operation of staying a blatant fraud.
Messages left with attorneys for Ruiz Hernandez and Garcia weren’t right away returned.
Investigators say the pair released MJ Money Funding and other connected entities in 2020 with the guarantee that they have been boosting funds from buyers to lend to little businesses in need of short-time period financial loans. They promised buyers returns of 10% a month or 120% in a 12 months.
The blend of altruism — the company’s site claimed Garcia, in her effort to assist hardworking people make funds, had been likened in her group to the Albanian nun Mom Teresa, who served the inadequate in Kolkata, India, for decades and won the Nobel Peace Prize just before currently being canonized by Pope Francis — and significant returns proved a hit. Inside of a year, the venture raised approximately $200 million from thousands of investors, the SEC explained.
But federal prosecutors and the SEC say really minimal lending ever occurred. Most of the income was utilised to pay out the salespeople who introduced in traders and pay out before buyers in the plan, in accordance to court docket documents. Hundreds of thousands additional 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 utilised to get luxury automobiles and commit in cryptocurrencies.
Inevitably, some traders grew uneasy, and 1 anonymously made a internet site accusing MJ Funds of currently being a Ponzi plan. The firm filed a lawsuit relocating to get the website taken down, saying its small business was totally legit — something investigators say was a bald-faced lie.
In late 2021, an undercover FBI agent approached MJ Money posing as an trader to obtain evidence, according to courtroom paperwork.
Garcia, who was to begin with sued by the SEC final yr, has partially settled the scenario, agreeing to transform around property for auction. She has not been charged criminally.
Ruiz Hernandez faces up to 20 many years in prison if convicted of wire fraud fees. He was introduced previous 7 days on $250,000 bond.