A Broward County woman who served as the CEO of a Pompano Beach business was sentenced on Tuesday to 20 years in federal prison for her role in a nearly $200 million Ponzi scheme, federal prosecutors said Tuesday.
Johanna Michely Garcia, 41, former president of MJ Capital Funding, LLC, pleaded guilty in July to conspiracy to commit mail and wire fraud. She received the maximum possible sentence.
Garcia was the leader of the scheme, which involved her company claiming to lend merchant cash advances, known as MCAs, to small businesses in and outside of Florida. Garcia and others sought investors to fund the MCAs, when in reality they funded few of such loans and “failed to earn anywhere near the profits it needed to pay the investors the promised returns,” federal prosecutors said in a news release.
Garcia paid previous investors with money from new investors and used millions for herself, according to prosecutors. She raised nearly $200 million from October 2020 to August 2021. Investors lost nearly $90 million of that.
The FBI and U.S. Securities and Exchange Commission cracked down on MJ Capital Funding in 2021, but Garcia and her co-defendants started new businesses under new names and continued to operate a similar scheme in order to pay back debts to previous investors, prosecutors said. After Garcia was arrested and while in federal custody, she was still leading the new scheme.
Garcia’s co-defendant Pavel Ramon Ruiz Hernandez, of Broward County, previously pleaded guilty and was sentenced to just over nine years in federal prison in September 2023.