MIAMI – Johanna Michely Garcia, the former Chief Executive Officer of MJ Capital Funding, LLC, was sentenced to 240 months (20 years) in prison today for her role in a massive Ponzi scheme.
Garcia, 41, from Broward County, Florida, pleaded guilty to conspiracy to commit mail and wire fraud. The scheme involved fraudulently soliciting approximately $190.7 million from investors under the guise of providing merchant cash advances (MCAs) to small businesses.
False Promises and Misappropriated Funds
Garcia and her co-conspirators, including Pavel Ramon Ruiz Hernandez, lured investors with false promises. They claimed investor funds would be used to fund MCAs and generate substantial returns. However, MJ Capital Funding made few loans and instead operated as a Ponzi scheme, using new investor money to pay off existing investors. Garcia also misappropriated millions of dollars for personal use. Investors suffered losses of nearly $90 million.
The Victims: Shattered Dreams and Financial Ruin
This elaborate scheme left a trail of devastation, with investors losing nearly $90 million. Many victims were individuals who had invested their life savings, retirement funds, or money intended for their children’s education. The emotional and financial impact on these individuals and families is immeasurable.
Second Ponzi Scheme
Even after the FBI and Securities and Exchange Commission (SEC) shut down MJ Capital Funding in 2021, Garcia continued her fraudulent activities. She orchestrated a new Ponzi scheme using various entities, including New Beginning Global Funding LLC and Lion Heart Capital Group L.L.C. This scheme operated similarly to the MJ Capital Funding fraud, with investors misled about how their funds would be used.
Co-conspirator Sentenced
Garcia’s co-conspirator, Pavel Ramon Ruiz Hernandez, was sentenced to 110 months in prison in September 2023 after pleading guilty to related charges.
Justice Served
“This significant sentence holds Johanna Michely Garcia accountable for her elaborate scheme that defrauded investors of millions,” said U.S. Attorney Markenzy Lapointe for the Southern District of Florida. “We remain committed to prosecuting those who prey on innocent investors and abuse the financial system for their personal gain.”
While Garcia’s 20-year sentence brings a sense of justice, the victims of her crimes continue to grapple with the financial and emotional fallout. This case underscores the importance of investor vigilance and the need for thorough due diligence before entrusting funds to any investment opportunity.
The FBI and the Florida Office of Financial Regulation investigated the case, with assistance from the SEC’s Miami Regional Office.
