Florida man charged with conspiring to commit Ponzi scheme fraud

Florida man charged with conspiring to commit Ponzi scheme fraud
Florida man charged with conspiring to commit Ponzi scheme fraud

A man from South Florida was charged with conspiring to commit wire fraud through a Ponzi investment scheme, with which he would have been awarded millions of dollars.

Pavel Ramon Ruiz Hernandez29, and his co-conspirators, would have disappointed to various investors more than 42 million dollars through the company MJ Capital Funding, LLC.

By running a Ponzi fraud scheme, they would have paid existing investors with money from new investors’ funds, while misappropriating millions of dollars, the Justice Department for the Southern District of Florida said.

The investigation conducted by the Federal Bureau of Investigation (FBI) revealed that the accused and his partners, through the Pompano Beach company MJ Capital Funding, offered merchant cash advances (MCAs), a type of short-term financing often used by small and medium-sized businesses.

From March to August 2021, when the first complaints were filed, Ruiz Hernández and his colleagues fraudulently solicited money from investors to finance MJ Capital Funding’s MCAs. It was also reported that they recruited others to solicit additional investors, paying the recruits around 10% of the money they raised each month.

According to official data, Ruiz Hernández and his co-conspirators lied to investors about MJ Capital Funding’s use of investor funds. The defendant said that they would use the money to provide financing advances to merchants and that the profits from MJ’s business would cover the returns to investors, which was not true.

In fact, MJ Capital Funding made little MCA and did not make the profits it needed to pay investor returns or principal amounts, the police report clarified.

Ruiz Hernández appeared this Tuesday in Miami-Dade federal court and, if found guilty, He will face a maximum sentence of 20 years in prison.announced Juan Antonio Gonzalezattorney for the Southern District of Florida, and Robert M DeWitt, special agent in charge of the FBI in the Miami office.

A federal district court judge will determine the sentence after considering the United States Sentencing Guidelines and other statutory factors.

MJ’s website, blocked by the authorities, redirects to another page that informs investors of the order against the company and reveals that thousands of complaints were filed by users who were victims of the alleged scam.

“We are reviewing the thousands of timely submitted proofs of claim and documents to identify valid claims that will be processed through this receivership proceeding. Please be patient,” the site reads.

The United States District Court for the Southern District of Florida, through an emergency order filed by the Securities and Exchange Commission (SEC), achieved on August 12, 2021 the temporary restriction and freezing of assets of MJ Capital Funding for an alleged Ponzi scheme and the misappropriation of investors’ income perpetrated by Johanna M. García, at the head of the company.

The MJ Capital scam is part of a larger fraud case in which Garcia and his companies MJ Capital Funding, LLC and MJ Taxes and More, Inc. raised at least $70 million from more than 2,150 investors in a fraudulent securities offering. García and the partners of his companies had promised investors annual returns of 120% to 180%, according to the website of the government institution.

Other fraudulent cases in Florida recently made the news. Three Miami-Dade County men stole more than a million dollars in shellfish pretending to be supermarket buyers. One of the defendants had posed as a supermarket buyer to appropriate approximately $1.3 million from a Fort Lauderdale food importer.

The article is in Spanish

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