MJ Capital Funding CEO Johanna M. Garcia Accused of Operating a Massive Ponzi Scheme by SEC

Last Updated: August 23, 2021

INVESTORS: The Sonn Law Group – a law firm with over 30 years of experience representing victims of Ponzi schemes – is investigating charges brought against Johanna M. Garcia, principal officer of MJ Capital Funding, LLC and MJ Taxes and More Inc., both based in Coral Springs Florida.

 

WATCH: Attorney Jeff Sonn Comments on the Alleged MJ Capital Ponzi Scheme on 7News Miami

 

MJ Capital Court Documents

The SEC recently obtained a temporary restraining order, an asset freeze, and the appointment of a receiver in order to put a stop to what they allege is a fraudulent Ponzi scheme and misappropriation of investor proceeds.

We have already heard from hundreds of investors who are concerned about their investments with Johanna M. Garcia and her companies, MJ Capital Funding and MJ Taxes and More. We are working hard to gather as much information as possible.

If you’ve invested with Johanna M. Garcia, we want to hear from you. Call the Sonn Law Group anytime at 844-689-5754 or complete the short form below to discuss your options for recovering investment losses.

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MJ Capital Funding Ponzi Scheme: Allegations Made in the SEC Complaint

mj capital funding Here is what we know so far, as put forth in the SEC's complaint:

1. For over a year, Johanna M . Garcia has been running a Ponzi scheme, using her companies to take in between $70.9 million and $128.8 million from over 2,150 investors who have been tricked into thinking they are funding loans to small businesses when in reality their outsize annualized "returns" of 120% - 180% have been funded with money obtained from new investors.

Among other relief, the Commission requests that the Court issue a Temporary Restraining Order and Preliminary Injunction to halt this ongoing scheme, freeze the assets of Garcia and her companies, MJ Capital Funding, LLC ("MJ Capital") and MJ Taxes and More Inc. ("MJ Taxes" and, with MJ Capital, the "MJ Companies"), and appoint a receiver over the MJ Companies.

2. Since at least June 2020, MJ Taxes began soliciting investments, agreeing to pay annual returns of varying amounts, typically 120%, for six-month investments.

3. By at least as early as October 2020, MJ Capital became the primary investment vehicle, representing that it would use investor money to fund small business loans called Merchant Cash Advances (“MCAs"). Between October 2020 and ongoing to the date of this Complaint, MJ Capital has promised investors an annual return of varying amounts, typically 120%.

4. Investors enter into a written agreement with the MJ Companies, initially called a Loan Agreement and later a Merchant Cash Advance Agreement, but Defendants have not registered these securities with the Commission.

5. With rare exceptions, the MJ Companies do not use investor funds to make MCAs, and the MJ Companies earn little revenue. However, they have to date been able to pay the returns promised to investors (a) through a rising stream of funds from new investors, and (b) by convincing existing investors to renew their existing investments, thus deferring the MJ Companies’ need to repay investors' principal.

6. By engaging in this conduct, the MJ Companies and Garcia violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 77e(a), 77e(c), and T7q(a); and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78;(b), and Exchange Act Rule 10b-5, 17 C.F.R. § 240.10b-5. In the alternative, Garcia, directly or indirectly, controls the MJ Companies and is therefore, pursuant to Exchange Act Section 20(a),
15 U.S.C. § 78t(a), jointly and severally liable with the MJ Companies for their violations of Exchange Act Section 10(b) and Rule 10b-5.


Over our 30+ year history the Sonn Law Group is has recovered hundreds of millions for victims of Ponzi schemes. If you invested with Johanna M. Garcia, MJ Capital Funding, and/or MJ Taxes and More, we want to help you recover your losses. Call us anytime at 844-689-5754 or complete this short form. We look forward to hearing from you.