A Florida woman was sentenced Tuesday to 20 years in prison after pleading guilty to running a nearly $200 million pyramid scheme.
Joanna Garcia 41-year-old female from Broward County Known in the community as “Mother Teresa,” she received the maximum sentence for one count of conspiracy to commit wire fraud and mail fraud. The court dismissed 28 other charges from her indictment.
Judge Jose Martinez of the Southern District of Florida also sentenced Garcia to three years of supervised release, a $100 special assessment, and additional restitution to be determined on March 3, the report said. United States Attorney's Office.
According to court documents, Mr. Garcia controlled MJ Capital Funding, which solicited investments from backers by promoting high-value loans known as merchant cash advances.
Garcia and his co-conspirators “illegally” [enriched] “He blackmailed himself by soliciting funds from investors through materially false and fraudulent representations and promises,” prosecutors said in a court filing.
The group told investors that the funds would be used to back these short-term, high-value loans and promised huge returns of 10% per month and 120% per year, according to the documents.
The miracle investment was so profitable that Garcia “often Called “Mother Teresa” in her community,” the since-deleted MJ Capital website claimed.
But the company issued few of those loans and failed to earn the returns promised to investors, prosecutors said.
“As a result, Ms. Garcia paid off investors by running a large-scale Ponzi fraud scheme, using new investor funds to pay existing investors while also using her own personal and misappropriated millions of dollars for profit,” the U.S. Attorney’s Office said in a press release Tuesday.
Garcia and MJ Capital insiders say they spent millions of dollars to fund their lavish lifestyles, including frequent travel, luxury clothing, crypto assets and luxury cars. securities and exchange commission.
The scam, which Garcia ran from October 2020 to August 2021, collected approximately $190 million. Prosecutors say investors lost nearly $90 million.
In 2021, MJ Capital investors filed a lawsuit against Wells Fargo, accusing the company of failing to prevent multi-million dollar fraud. March 2023, Wells Fargo agreed to pay $26.6 million to settle a lawsuit.
Mr. Garcia's partner, Pavel Ramon Luis Hernandez, was indicted in August 2022 and pleaded guilty in April 2023 to one count of conspiracy to commit wire fraud. In September 2023, he was sentenced to nine years and two months in prison and three years of supervised release.
According to court records, the FBI and SEC shut down the sham capital funding group in 2021, but Garcia and Hernandez quickly launched another group in the fall of that year.
Garcia led a new pyramid scheme before his arrest and while in Bureau of Prisons custody, prosecutors said Tuesday.
New Beginning Global Funding, New Beginning Capital Funding, Lion Heart Capital Group and other entities were used to solicit the investments used to fund the commercial loans. Instead, Garcia, Hernandez and other co-conspirators pocketed some of the funds and used the rest to repay previous investors, prosecutors said.
Garcia's lawyers said Hernandez was the real mastermind of the pyramid scheme and that Garcia's New Beginning group was “grossly misguided and clearly wrong” to repay former investors. He tried to claim that it was formed for the purpose.
The U.S. Attorney's Office said there was overwhelming evidence that Garcia was leading the scheme.
