On December 3, 2024, Johanna Michely Garcia, 41, of Broward County, Florida, was sentenced to 240 months in prison for leading a massive Ponzi scheme through her company, MJ Capital Funding, LLC. Garcia pled guilty on July 16, 2024, to conspiracy to commit mail and wire fraud, admitting her role in a scheme that defrauded investors of nearly $190.7 million.
Scheme Overview
Garcia and her co-conspirators, including Pavel Ramon Ruiz Hernandez, falsely claimed MJ Capital Funding was engaged in providing merchant cash advances (MCAs), a form of short-term financing for small businesses. Between October 2020 and August 2021, they solicited investments, claiming funds would be used to issue MCAs and returns would come from business profits. However, few loans were issued, and the company lacked the profits needed to fulfill the promised returns.
Instead, Garcia operated a Ponzi scheme, using funds from new investors to pay earlier investors. Court documents revealed that Garcia misappropriated millions of dollars for personal use, including luxury purchases, while investors collectively lost approximately $90 million.
Continued Fraud After Shutdown
After the FBI and the Securities and Exchange Commission (SEC) shut down MJ Capital Funding in the fall of 2021, Garcia and her associates launched new fraudulent ventures, including New Beginning Global Funding LLC, New Beginning Capital Funding LLC, Lion Heart Capital Group LLC, GMR Remodeling LLC, and Group Management LLC. These companies used the same fraudulent practices, claiming investments would fund commercial loans while actually paying earlier investors and supporting the conspirators’ lavish lifestyles.
Notably, Garcia continued running these schemes even after her arrest and while in federal custody.
Co-Conspirator Sentencing
Ruiz Hernandez, charged in August 2022, pled guilty in April 2023, and was sentenced to 110 months in prison in September 2023, followed by three years of supervised release.
Investigation and Prosecution
The case was investigated by the FBI Miami Field Office and Florida’s Office of Financial Regulation, with significant assistance from the SEC’s Miami Regional Office. U.S. Attorney Markenzy Lapointe, FBI Special Agent in Charge Jeffrey B. Veltri, and Florida Office of Financial Regulation Commissioner Russell C. Weigel, III, announced the sentencing.
Assistant U.S. Attorney Roger Cruz prosecuted the case, and Assistant U.S. Attorney Marx Calderon is handling asset forfeiture proceedings.
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