The article details the experience of Gilmer Bautista, who was looking for a way to earn extra money when someone on social media told him about MJ Capital Funding, which operated out of a Pompano Beach, FL tax office.
Batista was told he could earn incredible monthly returns on his principal by investing in MJ’s merchant cash advance business. He eventually handed over $45,000. He hasn’t gotten his money back and now the SEC accuses MJ Capital of operating a Ponzi scheme.
In August, 2021 the SEC put out a press release stating that it had filed an “emergency action and obtained a temporary restraining order, an asset freeze, and the appointment of a receiver to stop an alleged Ponzi scheme and misappropriation of investor proceeds perpetrated by Coral Springs, Florida resident Johanna M. Garcia and two entities she controls.”
MJ Capital Funding Allegedly Raised Over $70 Million
The SEC’s Complaint alleges that Johanna Garcia and her companies, including MJ Capital Funding, raised over $70M from at least 2,150 investors through fraudulent security offerings. Starting in the summer of 2020, the alleged scheme promised investors 120% to 180% return annually.
Some investors did receive monthly payments for a period of time, but according to the SEC very little of investor money was loaned to merchants and at least $20 million of investor money was used to pay earlier investors, which is a Ponzi scheme.
Red Flags For Ponzi Schemes & Other Investment Fraud
Though Bernie Madoff’s record-breaking Ponzi scheme more than a decade ago earned the public’s attention, there have been many lesser-known schemes in the years since.
To protect themselves from investment fraud losses, investors should use caution when they are told that they can earn consistently higher than average returns.
Some investors in a Ponzi scheme start small, then invest more when they see the company pays the consistent, high returns promised. Eventually the scheme collapses, and it’s revealed that the money was coming from other investors and not from a return on business operations.
Social media is a common tool for scammers to reach victims. Perpetrators tout luxury lifestyles and a record of success, which may be a fiction. Oftentimes, victims of Ponzi schemes and other fraud are share an ethnic, religious, or other affinity with each other and the schemers, which is exploited to build trust.
Recovering Losses From Ponzi Schemes And Other Fraud
Unfortunately for the victims, after a Ponzi or other scheme collapses the perpetrators don’t have enough money to make investors whole. Schemers can’t pull off their fraud without the use of banks or other third parties, which have the responsibility to report the fraud.
The class action lawsuit Silver Law Group is involved in on behalf of MJ Capital Funding victims was filed against Wells Fargo Bank, who it is alleged did nothing to stop the scheme and allowed it to defraud investors.
Scott Silver, Silver Law Group’s managing partner, recently gave a presentation on Ponzi schemes to the American Association of Justice and how investors may be able to recover their losses from responsible third parties.
Silver Law Group is a a nationally-recognized investment fraud and securities arbitration law firm that has extensive experience recovering Ponzi scheme losses for investors.
Scott Silver, Silver Law Group’s managing partner, is the chairman of the Securities and Financial Fraud Group of the American Association of Justice and represents investors nationwide in securities and investment fraud cases. If you have investment losses, contact Scott Silver for a no-cost consultation to discuss your options at ssilver@silverlaw.com or toll free at (800) 975-4345.