A Florida man and a woman authorities say is “often referred to as ‘Mother Teresa’ in her community” have been charged with running a $196m Ponzi scheme.
The Justice Department alleges that Pavel Ruiz, 29, took $6.5m of $42m defrauded from investors through the scheme run by Johanna Garcia’s company.
Mr Ruiz has been criminally charged in Miami federal court with conspiracy to commit wire fraud, a year after the SEC filed civil charges against Ms Garcia, of North Lauderdale.
Prosecutors say that the scheme brought in money from more than 15,400 investors across the United States.
“The MJ Companies and their owner, chief executive offer, and president, Johanna M. Garcia, operated the MJ Companies as a Ponzi scheme, which, from at least June 2020 until August 2021, raised more than $196 million from more than 15,400 investors nationwide through an unregistered fraudulent securities offering.”
A Securities and Exchange Commission filing against Ms Garcia, states that a blog for her company MJ Capital says that she received the “Mother Teresa” nickname as she found a way to “help hard working individuals make money and that she helps her merchant clients get the financing they need.”
Authorities say that MJ Capital offered cash advances to businesses that needed quick cash, but that “only a small fraction” of money brought in from investors was used for that purpose.
The SEC and Justice Department filings allege that Mr Ruiz spent the money on, among other things, crypto assets, a “luxury vehicle,” “luxury goods,” vacations and personal expenses.
The SEC says it has reached partial settlements with both Mr Ruiz and Ms Garcia, while Mr Ruiz is free on $250,000 bail while the criminal case against him continues.
