A South Florida lady generally known as “Mom Theresa” in her group has been accused of working her enterprise like a profitable Ponzi scheme that defrauded almost $200 million.
Johanna M. Garcia of North Lauderdale allegedly defrauded greater than 15,400 traders of as much as $196 million by her firm, MJ Capital Funding LLC, NPR reported Tuesday.
Based in 2020, MJ Capital is dedicated to connecting traders with small companies by a “service provider money advance,” or MCA.
Described as a “hard-working lady who has her priorities in line” in her firm bio, Garcia boasted of being a down-to-earth businesswoman who helped unusual individuals generate wealth – she was even known as “Mom Theresa”. [sic] in his group.
The ruse started to unravel in April 2021, when a web site appeared accusing MJ Capital of working a Ponzi scheme.
Garcia sued the nameless whistleblower for defamation and continued to gather cash from traders till August 2021, when the Securities and Change Fee filed a proper criticism towards the corporate.
Within the Aug. 9 submitting, the SEC alleges that MJ Capital used investor cash to fund “outdoors ‘annual returns’ of 120% to 180%,” whereas firm executives invested in private excursions and luxurious items.
Along with utilizing new money injections to fulfill current traders, the SEC says MJ Capital used unlicensed brokers and gross sales brokers to promote unregistered securities.
A federal decide responded to the submitting by freezing Garcia’s enterprise belongings and ordering them into receivership.
As Garcia awaits additional investigation, the case towards MJ Capital acquired new fodder final Tuesday, when the SEC filed a second lawsuit towards the corporate’s board member Pavel Ruiz.
The SEC alleges Ruiz, 29, performed a “important position in perpetuating the Ponzi scheme”.
Armed with a crew of round 70 gross sales brokers, Ruiz allegedly defrauded greater than 5,100 traders out of at the very least $46 million, together with $7.7 million he diverted to his private accounts.
In response to the SEC, Ruiz used among the pocketed cash to purchase a luxurious automotive and crypto belongings.
On the identical day the SEC criticism was launched, the U.S. Lawyer’s Workplace for the Southern District of Florida charged Ruiz with conspiracy to commit wire fraud.
It is unclear whether or not Garcia, who has not been named within the federal case, can even face related prices.
If convicted, Ruiz faces as much as 20 years in jail.
Final week, Garcia and Ruiz reached partial settlements with the SEC, delaying financial penalties till the conclusion of any legal proceedings.
Ruiz is presently free on $250,000 bail.
The MJ Capital scandal is simply the most recent in a troubling string of comparable circumstances, a few of which have seen traders scammed out of a whole bunch of thousands and thousands of {dollars}.
In March this 12 months, The Put up reported on the crackdown on a $300 million Ponzi scheme that led to FBI gunfire in Las Vegas. Simply final month, the SEC filed a lawsuit towards 11 individuals for his or her position in an elaborate crypto pyramid scheme that focused retail traders.
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