The former CEO of a South Florida business who ran a nearly $200 million Ponzi scheme has pleaded guilty to conspiracy to commit mail and wire fraud and is facing up to 20 years in prison. Johanna Michely Garcia, 41, of Broward County, was the president of MJ Capital Funding, LLC, created in 2020 and based in Pompano Beach, according to the indictment. The company purported to lend merchant cash advance loans, known as MCAs, to businesses in Florida and elsewhere in the country as an alternative financing option for small- and medium-sized businesses that needed quick funding.
Investors were told their money was used to fund the MCA loans and that they would receive about 10% per month in returns, an annual rate of 120%, the indictment said. In reality, MJ Capital funded few MCAs and “failed to earn anywhere near the profits it needed” to pay investors’ the promised returns and paid them back with new investors’ money. Garcia and her co-conspirator Pavel Ramon Ruiz Hernandez recruited people to solicit investors throughout Broward and Miami-Dade counties by paying them commissions, at least 10% of the amount they raised from investors, according to the indictment.
As Garcia continued seeking new investors, she and co-conspirators used the existing investors’ money to pay for personal expenses and luxury goods, cars, vacations, entertainment and her own personal investments. Garcia fraudulently received nearly $200 million from investors between October 2020 and Augu.