Johanna Michely García, 41, and former CEO of MJ Capital Funding, LLC, has pleaded guilty to defrauding investors of nearly $200 million under the guise of funding merchants through a Ponzi scheme, the U.S. Attorney's Office for the Southern District of Florida announced Monday.
The indictment against García was made public last July, charging her with conspiracy to commit wire and mail fraud, along with multiple counts of money laundering.
According to court documents, MJ Capital Funding, LLC was a Pompano Beach-based company that offered merchant cash advances (MCA), a type of short-term financing commonly used by small and medium-sized businesses, as reported by the Efe news agency.
The indictment alleges that from around October 2020 to August 12, 2021, García, Pavel Ramón Ruiz Hernández (arrested in 2022), and others fraudulently solicited money from investors under the pretense of funding MJ Capital Funding, LLC's MCAs.
It is also alleged that García, Ruiz Hernández, and their accomplices recruited others to solicit additional investors, typically paying the recruits about 10% of the money they raised.
García faces a maximum sentence of 20 years in prison for the conspiracy and money laundering charges. Ruiz Hernández was indicted in August 2022, pleaded guilty in April 2023, and was sentenced to nine years and two months in prison.
Details of the Ponzi Scheme Involving Johanna Michely García
Below are some frequently asked questions about the fraud case involving Johanna Michely García and MJ Capital Funding, LLC.
What was the role of MJ Capital Funding, LLC in the fraud?
MJ Capital Funding, LLC was used as a front to solicit nearly $200 million from investors under the false pretense of providing merchant cash advances to small and medium-sized businesses.
How did Johanna Michely García and her accomplices solicit investors?
García and her accomplices fraudulently solicited money from investors by claiming it would be used to fund MJ Capital Funding, LLC's merchant cash advances. They also recruited others to solicit additional investors, paying them around 10% of the money they raised.
What are the potential penalties for García and her accomplices?
García faces a maximum sentence of 20 years in prison for conspiracy and money laundering charges. Her accomplice, Pavel Ramón Ruiz Hernández, was sentenced to nine years and two months in prison after pleading guilty in April 2023.