A Florida woman at the center of a massive Ponzi scheme worth nearly $200 million is facing serious consequences. On Tuesday, Johanna Garcia, a 41-year-old from Broward County, was sentenced to 20 years in prison, the maximum punishment for her role in the scam. She pleaded guilty to one count of conspiracy to commit wire fraud and mail fraud, while 28 other charges were dropped, according to court documents.
Judge Jose Martinez handed down the sentence in U.S. District Court for the Southern District of Florida. In addition to her prison term, Garcia will serve three years of supervised release and pay a $100 special assessment. The exact amount of restitution—money she owes to victims—will be decided on March 3.
So, what exactly happened? Garcia ran a company called MJ Capital Funding, which promised investors their money would go toward providing short-term, high-interest loans called merchant cash advances (MCAs). Federal prosecutors say Garcia and her team told investors that profits from these loans would deliver annual returns of 120%. Sounds great, right? But here’s the catch: the business was a sham.
Instead of actually making these loans, Garcia and her co-conspirators used new investors’ money to pay back older ones—a textbook Ponzi scheme. They also funneled millions for their personal use. Between October 2020 and August 2021, Garcia’s fraudulent operation raked in a staggering $190.7 million, with investors losing nearly $90 million in the end.
And it didn’t stop there. Even after her original scheme was shut down by the FBI and the Securities and Exchange Commission (SEC) in 2021, Garcia and her team tried to pull off another scam. This time, they operated under new names like New Beginning Global Funding LLC and New Beginning Capital Funding LLC, telling investors the money would go toward commercial loans. But, just like before, they used new funds to pay off old debts and fund their lavish lifestyles. Prosecutors say Garcia was actively running this scheme even while in custody.
Her partner in crime, Pavel Ramon Ruiz Hernandez, also faced justice. He was charged in August 2022 and pleaded guilty in April 2023. By September 2023, he was sentenced to nine years and two months in prison, along with three years of supervised release.
Interestingly, in 2021, investors of MJ Capital sued Wells Fargo Bank, accusing it of aiding the fraud by not enforcing its anti-money laundering policies. The bank settled the case in March 2023, agreeing to pay $26.6 million.
Before Garcia’s sentencing, her attorneys argued she wasn’t the mastermind of the schemes, pinning much of the blame on Ruiz Hernandez. They also claimed that her actions in the second Ponzi scheme were a misguided attempt to repay her former investors. Prosecutors, however, shut that down, calling Garcia the true leader who caused devastating losses for more than 15,400 victims. They pushed for the 20-year sentence, which the judge ultimately imposed.
It’s a grim story of broken trust and financial ruin, leaving thousands of victims in its wake. The case serves as a stark warning about the dangers of schemes that promise returns that seem too good to be true.
