Florida Woman Sentenced to 20 Years in Prison for Orchestrating $200 Million Ponzi Scheme
In a stunning conclusion to a fraudulent scheme that spanned over a year, Johanna Garcia, a 41-year-old resident of Broward County, Florida, was handed a 20-year prison sentence for her role in a massive Ponzi scheme that defrauded thousands of investors out of nearly $200 million.
The Scheme Unfolds
Garcia, who controlled MJ Capital Funding, promised unsuspecting investors significant returns on their investments, touting an annual rate of 120%. However, prosecutors revealed that her company made few loans and failed to generate the profits needed to pay investors the promised returns. Instead, Garcia and her co-conspirators orchestrated a large-scale Ponzi fraud scheme, using new investor funds to pay existing investors while misappropriating millions of dollars for personal gain.
The Fallout
The fraudulent conspiracy, which took place between October 2020 and August 2021, resulted in investors losing nearly $90 million. In 2021, investors filed a lawsuit against Wells Fargo Bank, accusing the bank of aiding the fraud scheme by failing to follow its own anti-money-laundering policies. The bank ultimately agreed to settle the suit for $26.6 million.
Garcia’s Partner Sentenced
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. He was sentenced to nine years and two months in prison, plus three years of supervised release.
New Scheme Uncovered
Prosecutors revealed that after MJ Capital was shut down by the FBI and the Securities and Exchange Commission, Garcia, Ruiz Hernandez, and others launched a new, similar Ponzi scheme in fall 2021. Garcia led this new scheme, using entities called New Beginning Global Funding LLC and New Beginning Capital Funding LLC, among others, to defraud investors.
Sentencing Dispute
In a sentencing memo, Garcia’s attorneys argued that Ruiz Hernandez was the true leader of the scheme and that Garcia’s subsequent conduct was motivated by a desire to pay back her former investors. However, prosecutors rejected this characterization, urging the judge to sentence Garcia to 240 months’ imprisonment.
Justice Served
In the end, Judge Jose Martinez handed down the maximum possible sentence for Garcia, citing her role as the leader/organizer of the two Ponzi schemes that defrauded over 15,400 victims out of nearly $90 million. Garcia was also sentenced to three years of supervised release and a $100 special assessment, plus additional restitution to be determined at a later date.
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