South Florida Woman Sentenced in Nearly $200 Million Ponzi Scheme
On December 3rd, 2024, the United States Department of Justice (DOJ) announced that a South Florida woman has been sentenced for her role in a nearly $200 million Ponzi scheme. Johanna Michely Garcia—the former Chief Executive Officer (CEO) of an investment company called MJ Capital Funding, LLC—has been sentenced to serve 20 years in federal prison. Here, our Miami Ponzi scheme lawyer provides a more detailed overview of the charges and the criminal sentencing.
An Overview of the MJ Capital Funding, LLC Ponzi Scheme
The MJ Capital Funding, LLC was a Ponzi scheme that was orchestrated by a South Florida woman named Johanna Michely Garcia. Notably, it was a substantial fraud operation that swindled nearly $191 million from more than 2,150 different investors. Notably, the Ponzi scheme—which operated under the guise of providing merchant cash advances to small businesses—promised investors unrealistically high annual returns ranging from 120 percent to 180 percent.
Instead of using the invested funds for business loans, Ms. Garcia and her team used new investor money to pay returns to earlier investors. It was a classic Ponzi structure. Despite claiming to have major business operations, the actual amount of legitimate loans that were made was minimal. The SEC and DOJ determined that the Ponzi scheme was primarily used to fund the lavish lifestyles of Garcia and her co-conspirators.
Former MJ Capital Funding, LLC CEO Sentenced for Mail and Wire Fraud
Johanna Michely Garcia was charged with both federal mail fraud and federal wire fraud in relation to the MJ Capital Funding Ponzi scheme. Mr. Garcia was convicted of the charge. She has now been sentenced to prison. Johanna Michely Garcia has been sentenced to serve 20 years in federal prison for criminal mail and wire fraud charges. Notably, federal authorities have been able to recover around $100 million. However, that leaves investors with a collective loss of more than $90 million.
Ponzi Schemes Will Inevitably Collapse
At the broadest level, a Ponzi scheme is a form of investment fraud whereby the original investors are paid with the money put in by new investors. Gains are represented by the promoters of the fraud scheme—but they are not legitimate. Instead, funds are essentially shifted around. As soon as a sufficient amount of new investment stops coming into the fund, the Ponzi scheme will collapse under its own weight. Ponzi schemes are hollow—and they all inevitably fall apart. Some only last for a few months, whereas others may last for many years. The victims of Ponzi schemes need justice and full and fair financial compensation for their investment losses.
Consult With Our Miami Ponzi Scheme Lawyer Today
At Carlson & Associates, P.A., our Miami Ponzi scheme attorney advocates for investors. If you or your loved one has suffered losses in a Ponzi scheme, we are more than ready to help. Contact us today for a completely confidential initial appointment. With an office in Miami, we are committed to representing investors throughout South Florida.
Source:
justice.gov/usao-sdfl/pr/leader-200-million-ponzi-scheme-sentenced-20-years-prison
