A Florida woman who pleaded guilty to operating a nearly $200 million Ponzi scheme was sentenced on Tuesday to 20 years in prison.
Johanna Garcia, a 41-year-old woman from Broward County known as “Mother Teresa” in her community, received the maximum possible sentence for one count of conspiracy to commit wire fraud and mail fraud. The court dismissed 28 other counts from her indictment.
Judge Jose Martinez of the Southern District of Florida also sentenced Garcia to three years of supervised release, a $100 special assessment and additional restitution to be determined March 3, according to the US Attorney’s Office.
Garcia controlled MJ Capital Funding, which sought investments from backers by promoting high-cost loans called merchant cash advances, according to court documents.
Garcia and her co-conspirators “unlawfully [enriched] themselves by soliciting investor funds through materially false and fraudulent representations and promises,” prosecutors said in the court filing.
The group told investors their funds would be used to back these short-term, high-cost loans and promised sizable returns of 10% per month, an annualized rate of 120%, according to the documents.
The miracle investments were so profitable that Garcia was “often referred to as ‘Mother Teresa’ in her community,” the MJ Capital website, which has since been taken down, claimed.
But the company issued few of these loans and failed to earn the profits it had promised investors, prosecutors said.
“As a result, Garcia paid investors by running a large Ponzi fraud scheme, paying existing investors using new investor funds while misappropriating millions of dollars for her own personal benefit,” the US Attorney’s office said in a press release on Tuesday.
Garcia and MJ Capital’s insiders spent millions of dollars to fund their own luxurious lifestyles, including frequent travel, high-end clothing, crypto assets and luxury vehicles, according to the Securities and Exchange Commission.
The scam – which Garcia operated from October 2020 through August 2021 – raked in around $190 million. Investors lost nearly $90 million, prosecutors said.
In 2021, MJ Capital investors filed a lawsuit against Wells Fargo and accused the bank of failing to prevent the multi-million-dollar fraud. In March 2023, Wells Fargo agreed to pay $26.6 million to settle the suit.
Garcia’s partner, Pavel Ramon Ruiz Hernandez, was charged in August 2022 and pleaded guilty in April 2023 to one count of conspiracy to commit wire fraud. In September 2023, he was sentenced to nine years and two months in prison, along with three years of supervised release.
The FBI and SEC shut down the fake capital funding group in 2021 – but Garcia and Hernandez soon launched another one in the fall of that year, according to court records.
Garcia led the new Ponzi scheme up until her arrest – and after, while she was in Bureau of Prisons custody, prosecutors said on Tuesday.
New Beginning Global Funding, New Beginning Capital Funding, Lion Heart Capital Group and other entities were used to solicit investments that would be used to fund commercial loans. Instead, Garcia, Hernandez and other co-conspirators pocketed some of the money and used the rest to pay off previous investors, prosecutors said.
Garcia’s attorneys tried to argue that Hernandez was the true mastermind behind the Ponzi schemes – and that Garcia’s “New Beginning” groups, “though deeply misguided and plainly wrong,” were formed to pay back former investors.
The US Attorney’s Office said overwhelming evidence indicated Garcia was leading the schemes.
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
