A Florida lady who pleaded responsible to working a virtually $200 million Ponzi scheme was sentenced on Tuesday to twenty years in jail.
Johanna Garcia, a 41-year-old lady from Broward County often called “Mother Teresa” in her group, obtained the utmost doable sentence for one rely of conspiracy to commit wire fraud and mail fraud. The courtroom dismissed 28 different counts from her indictment.
Choose Jose Martinez of the Southern District of Florida additionally sentenced Garcia to a few years of supervised launch, a $100 particular evaluation and extra restitution to be decided March 3, in keeping with the US Lawyer’s Workplace.
Garcia managed MJ Capital Funding, which sought investments from backers by selling high-cost loans referred to as service provider money advances, in keeping with courtroom paperwork.
Garcia and her co-conspirators “unlawfully [enriched] themselves by soliciting investor funds through materially false and fraudulent representations and promises,” prosecutors mentioned within the courtroom submitting.
The group advised buyers their funds could be used to again these short-term, high-cost loans and promised sizable returns of 10% monthly, an annualized fee of 120%, in keeping with the paperwork.
The miracle investments have been so worthwhile that Garcia was “often referred to as ‘Mother Teresa’ in her community,” the MJ Capital web site, which has since been taken down, claimed.
However the firm issued few of those loans and didn’t earn the earnings it had promised buyers, prosecutors mentioned.
“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 Lawyer’s workplace mentioned in a press launch on Tuesday.
Garcia and MJ Capital’s insiders spent tens of millions of {dollars} to fund their very own luxurious existence, together with frequent journey, high-end clothes, crypto belongings and luxurious automobiles, in keeping with the Securities and Alternate Fee.
The rip-off – which Garcia operated from October 2020 by means of August 2021 – raked in round $190 million. Buyers misplaced almost $90 million, prosecutors mentioned.
In 2021, MJ Capital buyers filed a lawsuit in opposition to Wells Fargo and accused the financial institution of failing to forestall the multi-million-dollar fraud. In March 2023, Wells Fargo agreed to pay $26.6 million to settle the swimsuit.
Garcia’s associate, Pavel Ramon Ruiz Hernandez, was charged in August 2022 and pleaded responsible in April 2023 to at least one rely of conspiracy to commit wire fraud. In September 2023, he was sentenced to 9 years and two months in jail, together with three years of supervised launch.
The FBI and SEC shut down the faux capital funding group in 2021 – however Garcia and Hernandez quickly launched one other one within the fall of that 12 months, in keeping with courtroom data.
Garcia led the brand new Ponzi scheme up till her arrest – and after, whereas she was in Bureau of Prisons custody, prosecutors mentioned on Tuesday.
New Starting World Funding, New Starting Capital Funding, Lion Coronary heart Capital Group and different entities have been used to solicit investments that will be used to fund industrial loans. As an alternative, Garcia, Hernandez and different co-conspirators pocketed a number of the cash and used the remainder to repay earlier buyers, prosecutors mentioned.
Garcia’s attorneys tried to argue that Hernandez was the true mastermind behind the Ponzi schemes – and that Garcia’s “New Beginning” teams, “though deeply misguided and plainly wrong,” have been fashioned to pay again former buyers.
The US Lawyer’s Workplace mentioned overwhelming proof indicated Garcia was main the schemes.
