Johanna Garcia claimed her service supplier cash-advance enterprise was so helpful to small firms in Florida that she was similar to the Catholic saint Mother Teresa.

Nevertheless to the 15,400 merchants who sank $194.1 million into MJ Capital Funding, the lender Garcia launched collectively together with her confederate, Pavel Ramon Ruiz Hernandez, it was merely a Ponzi scheme, federal investigators say.

Closing week, Ruiz Hernandez, 29, of Broward County, was hit with federal wire-fraud charges in Miami. Garcia, who had been MJ Capital’s president and chief authorities, had earlier been named in a civil go properly with launched by the Securities and Change Charge, which accused the operation of being a blatant fraud.

Messages left with attorneys for Ruiz Hernandez and Garcia weren’t immediately returned.

Investigators say the pair launched MJ Capital Funding and totally different related entities in 2020 with the promise that they’d been elevating money from merchants to lend to small firms in need of short-term loans. They promised merchants returns of 10% a month or 120% in a yr.

The mix of altruism — the company’s site claimed Garcia, in her effort to help hardworking people make money, had been likened in her group to the Albanian nun Mother Teresa, who served the poor in Kolkata, India, for a few years and gained the Nobel Peace Prize sooner than being canonized by Pope Francis — and extreme returns proved profitable. Inside a yr, the enterprise raised nearly $200 million from a whole bunch of merchants, the SEC said.

Nevertheless federal prosecutors and the SEC say little or no lending ever occurred. A whole lot of the money was used to pay the salespeople who launched in merchants and pay out earlier merchants inside the scheme, in response to courtroom docket paperwork. Tens of hundreds of thousands further went into the pockets of the company’s founders, investigators alleged.

Prosecutors say Ruiz Hernandez funneled some $7.7 million into his private accounts which he used to buy luxurious automobiles and put cash into cryptocurrencies.

In the end, some merchants grew uneasy, and one anonymously created a site accusing MJ Capital of being a Ponzi scheme. The company filed a lawsuit transferring to get the situation taken down, claiming its enterprise was solely official — one factor investigators say was a bald-faced lie.

In late 2021, an undercover FBI agent approached MJ Capital posing as an investor to assemble proof, in response to courtroom docket paperwork.

Garcia, who was initially sued by the SEC closing yr, has partially settled the case, agreeing to point out over property for public sale. She has not been charged criminally.

Ruiz Hernandez faces as a lot as 20 years in jail if convicted of wire fraud charges. He was launched closing week on $250,000 bond.