What the MJ Capital Fraud Can Warn Us About Ponzi Schemes

 The Securities and Exchange Commission charged Johanna Garcia, the owner of MJ Capital Funding, with fraud on August 12, 2021.

More than 2,000 investors are now trying to figure out what to do after the SEC shut down Pompano Beach-based MJ Capital Funding. The alleged capital funding organization was running what is thought to be a $100 million Ponzi scheme.

What They Claimed to Customers

MJ Capital became the primary investment vehicle by at least October 2020, indicating that it would use investor funds to fund small business loans known as Merchant Cash Advances. MJ Capital promised investors an annual return of varied amounts, often 120 percent, between October 2020 and the date of this Complaint.

The Truth: A Ponzi Scheme

The MJ Companies do not use investor funds to build MCAs, and they generate very little money. However, they have been able to pay the promised returns to investors by:

●Attracting new investors
●Persuading existing investors to renew their existing commitments.

Thus, deferring the Companies’ obligation to refund investors’ principle. The bottom line is, MJ Capital is a Ponzi Scheme.

What This Means

The FCC deemed it a security risk since it lacked the necessary licenses and standards, and their actions came on Friday for both the original and new investors.

Some users are concerned that their monthly checks would be delayed with the company’s assets blocked and receivership in place. Others are unsure what the SEC’s lawsuit and interim restraining order are all about.

The SEC will try the company under the Exchange Act Section 10(b) and Rule 10b-5 for violating the Securities Act of 1933. MJ Capital’s assets have been frozen for alleged fraud, and they will appear in court in early September to fight these civil charges.


Source: https://writeupcafe.com/community/what-the-mj-capital-fraud-can-warn-us-about-ponzi-schemes/?snax_post_submission=success#

Location: Miami, FL, USA

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