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SEC Obtains Emergency Asset in Freeze in Florida Ponzi Scheme Case

On August 13th, 2021, the Securities and Exchange Commission (SEC) announced Ponzi scheme charges against Florida resident Johanna M. Garcia and two companies that she owned and controlled (MJ Capital Funding LLC and MJ Taxes and More Inc.). In doing so, the federal agency obtained an emergency asset freeze. The SEC alleges that Ms. Garcia raised more than $70 million from approximately 2,150 unsuspecting investors in a fraudulent securities offering.  In this article, our Florida Ponzi scheme attorney provides a more detailed overview of the allegations. 

Ponzi Scheme: Johanna M. Garcia, MJ Capital Funding LLC, and MJ Taxes and More 

Background & Facts

The Securities and Exchange Commission filed its complaint in the United States District Court of the Southern District of Florida. The Ponzi scheme allegations are centered around Johanna M. Garcia, a South Florida resident and the principal officer of two companies:

  • MJ Capital Funding LLC; and
  • MJ Taxes and More Inc.

According to the agency, Ms. Garcia began soliciting money for these companies from investors in or around June of 2020. Investors were told their capital was needed to lend to small/mid-sized businesses. Further, they were promised a return far above the market rate. In total, she raised at least $70 million and perhaps as much as $120 million.  

Ponzi Scheme Allegations 

The investment entities MJ Capital Funding and MJ Taxes and More Inc. were marketed to investors as being in the business of a specialized type of small business loan called a “merchant cash advances” or a “MCAs”. In reality, companies controlled by Ms. Garcia made very few legitimate small business loans. The SEC complaint states that only $2.9 million was used for the company’s stated purpose. The investment entities made little revenue. In reality, investor money was simply being shuffled around in the manner of a classic Ponzi scheme – primarily to pay Garcia and her salespeople and to repay some of the earlier investors The Ponzi scheme stayed afloat by:

  • Raising additional funds from new investors; and
  • Convincing existing investors to renew their investments. 

Emergency Asset Freeze 

The SEC has obtained an emergency asset freeze against Johanna M. Garcia and her two companies—MJ Capital Funding LLC, and MJ Taxes and More. The agency is working to preserve as much as possible for investors. Additionally, the SEC is also seeking a permanent injunction, disgorgement of all ill-gotten gains, the imposition of civil financial penalties, and personal sanctions against Ms. Garcia. A court date in this case has been set for August 25th, 2021. 

Call Our Florida Ponzi Scheme Attorney Today

At the office of Gregory Tendrich, P.A., our Boca Raton securities fraud lawyer has the skills and experience to represent victims of Ponzi schemes. If you suffered losses in MJ Capital Funding LLC, MJ Taxes, or any other investment fraud scheme, we can help. For a free, fully confidential review of your case, please contact us today. From our Boca Raton office, we represent investors throughout the US, with special emphasis in South Florida, including in West Palm Beach, Delray Beach, Boynton Beach, Lake Worth, and Port St. Lucie.

Resources:

sec.gov/litigation/complaints/2021/comp-pr2021-151.pdf

sec.gov/news/press-release/2021-151?utm_medium=email&utm_source=govdelivery

Gregory Tendrich, PA
Gregory Tendrich, P.A. serves clients throughout Florida, including the cities of West Palm Beach, Palm Beach, Delray Beach, Boynton Beach, Boca Raton, Port St. Lucie, Lake Worth, Wellington, Riviera Beach, Palm Beach Gardens, Fort Pierce, Vero Beach, Hobe Sound, Jupiter Island, North Palm Beach, Lake Park, Lantana, Stuart, Palm City, Jensen Beach, Tequesta and Juno Beach and represents clients in Palm Beach County, Martin County, St. Lucie County, Indian River County and throughout Florida.

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