Today, in a Miami Federal courtroom, Johanna Michely Garcia learned her fate after years of confinement for a Ponzi scheme she pleaded guilty to totaling over $190 million. The judge sentenced her to 240 months in prison, 20 years, which was the maximum sentence and the amount the government asked for. The judge seemed very intent on sending a message to her and would be criminals thinking of doing something similar that her and Pavel Ruiz did. As her co-conspirator, Ruiz received just over 9 years. The judge heard defense counsels argument on why her sentence should be in the same ball park but he simply wasn’t buying it.
Judge Jose Martinez heard 3 powerful victim impact statements in court today with dozens of others offered in court documents.
The Ponzi scheme
Johanna Michely Garcia, 41, once hailed as a successful, Mother Theresa-like figure in the community, understood and admitted she committed wire fraud, mail fraud, and conspiracy to commit wire fraud in an over $150 million Ponzi scheme from her offices in South Florida.
Ms Garcia and her other accomplices, one of whom already pleaded guilty, ran this investment scheme that was supposed to use money from investors to fund merchant cash advances, a form of short-term business financing. Ms. Garcia, the owner of MJ Capital and other entities, and Pavel Ramon Ruiz Hernandez hired almost 70 representatives to raise funds from over 2000 investors.
Instead, they didn't fund many advances at all, used the money to pay back only some investors, and then took money from the rest to fund their lavish lifestyle. They continued to raise money but weren’t ever going to be able to pay back all of the money with the promised returns of over 100% annually.
The whole operation came to an end in August of 2021 when a civil complaint was filed by the Securities and Exchange Commission.
In 2022, Pavel Ramon Ruiz Hernandez was charged criminally with fraud and then pled guilty in 2023. He received just over 9 years in prison.
In August of 2023, a South Florida federal grand jury charged Johanna Michely Garcia with conducting a fraud scheme, totaling approximately $190,700,000.
Victims turned plaintiffs in this case as they brought a class action lawsuit against Wells Fargo Bank, N.A. (“Wells Fargo”) alleging that it aided and abetted MJ Capital in the fraud. The case was settled for $26.625 million. The settlement was reached “to avoid the uncertainties, delays, and expenses of ongoing litigation”.
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