Johanna Michely Garcia, who previously held the position of Chief Executive Officer at MJ Capital Funding, LLC, received a sentence of 240 months in prison.
On July 16, a 41-year-old individual from Broward County, Fla., admitted guilt to charges of conspiracy related to mail and wire fraud. Garcia orchestrated a scheme that entangled others, such as Pavel Ramon Ruiz Hernandez, in a fraudulent investment operation amounting to around $190,700,000.
Court documents reveal that Garcia’s MJ Capital Funding was allegedly involved in offering merchant cash advances, a form of short-term financing commonly utilized by small businesses. From October 2020 to August 2021, Garcia worked with others to deceitfully raise funds from investors for MJ Capital Funding’s MCAs. Garcia and her associates enlisted individuals to attract investors for MJ Capital Funding’s investment opportunity and compensated those recruiters with commissions.
Legal documents indicate that Garcia and her associates, both directly and indirectly, provided misleading statements and deceptive representations to investors regarding the characteristics of the MJ Capital Funding investment and the allocation of investor funds. Garcia and others misled investors by claiming that their funds would support MCAs, assuring them that returns would come from the profits generated by MJ Capital Funding’s MCA operations.
Despite the company’s efforts, it issued a limited number of loans and fell significantly short of generating the necessary profits to fulfill the promised returns to its investors. Consequently, Garcia deceived investors through a massive fraudulent scheme, using funds from new investors to pay off existing ones while diverting millions for her personal gain. Out of the almost $200 million collected, investors faced losses totaling nearly $90 million.
Court records reveal that following the closure of MJ Capital Funding by the FBI and Securities and Exchange Commission (SEC) in the fall of 2021, Garcia, Ruiz Hernandez, and others initiated a new Ponzi scheme similar to the previous criminal operation. Garcia was at the forefront of this new scheme from the very beginning, continuing her involvement until her arrest, and even afterward, while in the custody of the Bureau of Prisons.
Garcia and her associates employed several entities for their latest fraudulent operation, which featured New Beginning Global Funding LLC, New Beginning Capital Funding LLC, Lion Heart Capital Group L.L.C., GMR Remodeling LLC, and Group Management LLC. In a manner reminiscent of the MJ Capital Funding scheme, Garcia and her associates assured victims that their investments would be allocated towards commercial loans. The funds collected were actually utilized to settle debts with earlier investors and to support the lavish lifestyles of Garcia and her accomplices.
In August 2022, Ruiz Hernandez faced charges, entered a guilty plea in April 2023, and received a sentence in September 2023 of 110 months in prison, along with three years of supervised release.
The announcement was made by U.S. Attorney Markenzy Lapointe for the Southern District of Florida, Special Agent in Charge Jeffrey B. Veltri from the FBI Miami, and Russell C. Weigel, III, Commissioner of the Florida Office of Financial Regulation (OFR).
Federal Bureau of Investigation The investigation into this case was conducted by Miami and OFR. The collaboration between the SEC’s Miami Regional Office and Florida’s Office of Financial Regulation proved to be extremely beneficial. The case was prosecuted by Assistant U.S. Attorney Roger Cruz. Marx Calderon, an Assistant U.S. Attorney, is overseeing asset forfeiture matters.
