Five more possible cronies of Broward’s ‘Mother Teresa’ charged in her $196M fraud
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The MJ Capital Funding Fraud
Johanna Garcia’s guilty plea brings the MJ Capital Funding fraud totals to three guilty pleas; $190 million fraudulently raised; and $90 million lost by investors.
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Five more possible cronies of Broward’s ‘Mother Teresa’ charged in her $196M fraud
A Broward woman who called herself ‘Mother Teresa’ admits a $190 million Ponzi scheme
Broward man and ‘Mother Theresa’ accused of raising $196 million in a Ponzi scheme
A Broward ‘Mother Theresa,’ her cronies — and, the feds say, a $190 million Ponzi scheme
A Broward fraudster cost investors $25 million. He’ll pay with prison time and money
While the Broward fraudster who ran a $196 million Ponzi scheme out of a Pompano Beach strip mall sits in federal prison awaiting sentencing, the Securities and Exchange Commission charged five people with helping execute the scam.
Last week, the SEC filed complaints against West Miami-Dade lawyer Karina Fernandez, Doral’s Leonela Duarte, North Lauderdale’s Bryan Guayara, Tamarac’s Marco Rosas and Margate’s Erick Ruiz for their roles in the MJ Capital Funding securities fraud and operating as unlicensed brokers.
The scam was run by North Lauderdale’s Johanna Garcia, MJ Capital’s president. MJ Capital’s website once crowed that she’s “often referred to as ‘Mother Teresa’ in her community” for helping people get the cash flow they need to make their small businesses go.
Now, MJ Capital’s website redirects to a site run by Kozyak Tropin Throckmorton, the law firm of court-appointed receiver Bernice Lee. “Mother Teresa” sleeps in the Federal Detention Center in Miami. She’s scheduled to be sentenced Oct. 31 in Judge Jose Martinez’s court after pleading guilty to conspiracy to commit mail fraud and wire fraud.
Last week’s charges, being civil and not criminal, won’t result in any of the five joining Garcia, plus Pavel Ruiz Hernandez and Christian Gonzalez who were also sentenced to prison for their MJ Capital scam activities. The SEC charges seek to recover money earned by the scam, to impose civil penalties and limit future financial activities. Garcia has already been charged by the SEC with the money penalty to be determined.
None of the case dockets listed lawyers for Fernandez, Duarte, Guayara, Rosas or Ruiz. Fernandez hung up on a Miami Herald reporter Wednesday.
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The MJ Capital Funding Fraud
Some businesses legitimately make merchant cash advances (MCAs) — short term, high interest loans to businesses, similar to payday loans to individuals. MJ Capital Funding claimed to do this from the Pompano Beach strip mall at 2754 W. Atlantic Blvd.
Instead, Garcia’s admission with her guilty plea says MJ Capital operated as a Ponzi scheme from June 2020 through August 2021. Of the $196 million raised, only $923,000 was used for MCAs.
“MJ Capital funded only a relatively small numbers of MCAs and failed to earn the profits it needed to pay the investor returns and principal promised investors,” the guilty plea says. “As a result, Garcia and her co-conspirators paid investor returns by paying existing investors using new investor funds.”
Meanwhile, Garcia and her associates “misappropriated at least $7.35 million of investor funds on a variety of purchases unrelated to the business, including credit card payments, travel, entertainment, restaurants, and luxury goods and clothing,” the SEC complaints say.
If you tell investors you’ll spend their money on a business and just spend the money on your personal life business, that’s fraud. These SEC charges say the five hid these truths about MJ Capital from investors and profited from it.
READ MORE: Aventura CEO’s sentence in ripoff of 3,400 investors: 1 year per each $50 million stolen
Karina Fernandez
Fernandez, who graduated from Tulane Law and became a Florida Bar member in 2019, ran a team of 64 sales agents as an MJ Capital manager. She raised relatively little compared to the other four, the complaint against her said, $891,000 from 89 investors from November 2020 through August 2021.
But, Fernandez, the complaint says, brought MJ Capital to the digital world through Zoom meetings and activity on an Instagram page, “Entrepreneur | Lawyer on Instagram.”
The complaint says in a 2021 Instagram live video, Fernandez claimed investors who put $6,000 into MJ Capital, getting 10% per month, could have $100,000 in three years. Another video, the complaint said, Fernandez said she turned money made from an “absolutely amazing” investment into an investment portfolio that allowed her to leave her job as an attorney.
“She based her claim...on the commissions she received from selling MJ Capital’s securities and her parents covering her living expenses, not on her investment portfolio as she stated in the video,” the complaint said. “In fact, at the time she posted the video, Fernandez had only invested $4,000 with MJ Capital, which provided for a monthly “return” of 10%, or $400 a month.”
In May, “Fernandez created and sent a video to her sales agents through either a Telegram or WhatsApp chat stating that MJ Capital was not operating a Ponzi scheme and explaining why it was not doing so,” the complaint also said. “She sent this video to her sales team because some of them asked her whether MJ Capital was a Ponzi scheme.”
Also, like the others, the SEC says Fernandez acted as an unregistered broker while dealing in MJ Capital and MJ Taxes’ unregistered securities.
The complaint estimates she made about $362,000 in commission from MJ Capital, split by $132,000 in cash and $230,000 to her through her company, KNF International. State records for the now-inactive company say Karina Fernandez was the CEO and Sussy Fernandez was the manager of the company based out of Sussy Fernandez’s home.
Leonela Duarte
The SEC complaint against Duarte claims she “personally raised at least $1.8 million from about 90 investors in the United States and abroad” from September 2020 through August 2021.
“She often met in person with prospective investors to tell them about the MJ Capital investment opportunity,” her complaint says.
This personal touch added up to $1.6 million in commissions from MJ Capital, the complaint said, paid through three now-inactive companies run out of an AMLI 8800 apartment in Doral: HAMN, LLC, managers Leonela Duarte Colina and Harry Medina Navarro; Le Duarte USA LLC; and Leduarte, Corp.
READ MORE: A Miami lawyer got caught lying about cases — and her time as a Broward public defender
Bryan Guayara
The complaint against Guayara describes him as “a lead sales agent and “board member” of MJ Capital” although he doesn’t appear as an officer on the state filings for MJ Capital Funding or MJ Taxes & More.
Guayara and his team of 44 sales agents raised, the complaint says, about $7.6 million from about 720 investors nationwide from June 2020 through August 2021. His team made $12.7 million in commissions, about $2.3 million went to him. That broke down, the complaint says, as $781,000 directly to Guayara and $1.6 million to DavibezCreations LLC, which Guayara ran out of a Plantation commercial building.
Marco Rosas
Rosas’ complaint calls him “an MJ Capital board member” as well as a manager running about 30 sales agents. From July 2020 through August 2021, Rosas lured $6.1 million from about 377 investors.
This earned his sales team about $4.2 million in commissions. Rosas, the complaint said, earned $1.7 million in commissions: $900,000 in personal checks; $160,000 in cash; $297,000 form MJ Capital directly to a title company to buy real estate for Rosas; and $368,000 to Zio Marco Transportation LLC, an inactive Orlando company Marco Rosas Scamarone runs; Zio Marco Services, which Rosas and Mauricio Rosas still run out of a Tamarac house; and M5 Store LLC, an inactive company based in a Coral Springs apartment.
Erick Ruiz
Ruiz’s complaint calls him a “lead sales agent and manager” of MJ Capital. His team of 11 sales agents raised $2.5 million from about 240 people from July 2020 through August 2021.
Ruiz made $1.5 million in commissions. The complaint said he received that in $1.1 million in checks, $60,000 in cash and $400,000 to Four Corners Investors Group LLC., which Ruiz ran out of his Margate house.
The SEC’s ongoing investigation is being done by the Miami offices of Raynette R. Nicoleau and Julia D’Antonio with the litigation handled by Stephanie N. Moot.
This story was originally published October 2, 2024 at 3:10 PM.
