Thursday, December 5, 2024
Garcia’s company, MJ Capital Funding, was promoted as specializing in merchant cash advance (MCA), a type of short-term financing for small businesses based on future credit or debit card sales that is familiar product offered by ISOs and merchant level salespeople. But in the case of MJ Capital Funding, investors were promised high returns—up to 120 percent on six-month investments—allegedly generated by profits from funding MCAs. However, court documents revealed that MJ Capital made few loans and generated insufficient profits to sustain the promised payouts.
Instead, Garcia operated a Ponzi scheme, using funds from new investors to pay earlier ones while diverting millions for personal use. Between October 2020 and August 2021, Garcia and her co-conspirators recruited over 2,000 investors, many of whom lost substantial savings. Of the $190.7 million raised, approximately $90 million was lost.
Even after the FBI and Securities and Exchange Commission (SEC) shut down MJ Capital Funding in 2021, Garcia continued her fraudulent activities. Prosecutors revealed that she launched a similar scheme under new business entities, including New Beginning Global Funding LLC and Lion Heart Capital Group, while in federal custody. These operations mirrored the original fraud, with Garcia and her associates falsely claiming that investor funds would be used for commercial loans.
“Garcia displayed an astonishing level of audacity, continuing to exploit victims while under investigation and even after her arrest,” said U.S. Attorney Markenzy Lapointe. One of Garcia’s co-conspirators, Pavel Ramon Ruiz Hernandez, was sentenced in September to over nine years in prison for his role in the schemes.
Merchant cash advances are a legitimate form of business financing, providing lump-sum payments to businesses in exchange for a percentage of future sales. While they can be a lifeline for businesses with steady credit card transactions, MCAs are not traditional loans and often carry high fees. Garcia exploited this lesser-known financing tool to create the illusion of a thriving enterprise, preying on investors unfamiliar with the intricacies of MCAs.
The case highlights the significant toll on victims who trusted Garcia with their savings. Many were lured by promises of stable, lucrative returns but were left financially devastated.
“Today’s sentencing sends a clear message: fraudsters who prey on investors’ trust and livelihoods will face serious consequences,” said FBI Special Agent in Charge Jeffrey B. Veltri.
Federal authorities are working to recover and return misappropriated funds to victims. Assistant U.S. Attorney Marx Calderon is overseeing asset forfeiture efforts, though it remains uncertain how much can be recovered from Garcia’s schemes.
The investigation was a joint effort by the FBI, SEC, and the Florida Office of Financial Regulation.
Financial experts have urged investors to verify the legitimacy of opportunities and consult professionals before committing funds to unfamiliar ventures. The sentencing brings a measure of closure to a saga that upended the lives of hundreds of investors, they noted, adding that for Garcia, the next 20 years will be spent behind bars—a stark reminder of the heavy price of greed. 
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