MJ Capital Funding
Legal name: Johanna M. Garcia & Pavel R. Hernandez
A $196M merchant-cash-advance Ponzi
Case facts
- Region
- United States (South Florida)
- Estimated loss
- ~$196M across 16,000+ investors
- Victims
- Primarily Latino retail investors in Broward & Miami-Dade counties
- Filed
- Jun 6, 2026
Last reviewed .
Johanna M. Garcia and Pavel R. Hernandez ran MJ Capital Funding as a ~$196 million Ponzi scheme disguised as a merchant cash-advance business, targeting Latino investors across South Florida. Both are now serving federal prison sentences.
The pitch
MJ Capital Funding marketed itself as a *merchant cash advance* (MCA) shop: investors put in capital, MJ Capital lent it to small businesses at high interest, and investors collected an advertised 10% monthly return. The pitch ran heavily on Spanish-language YouTube and Facebook in South Florida, with church-and-community testimonials.
The MCA business was almost entirely fictional. Inflows from new investors paid the "returns" of older ones.
Collapse
- August 2021 — SEC obtained an emergency asset freeze and appointed a receiver
- More than 16,000 investors had put in approximately $196 million
- A court-appointed receiver began clawing back proceeds from net-winners
Criminal outcomes
- Pavel R. Hernandez — sentenced September 5, 2023 to 110 months (9 years 2 months) in federal prison
- Johanna M. Garcia — sentenced December 3, 2024 to 240 months (20 years), the statutory maximum for her wire-fraud conspiracy count
- Both ordered to pay restitution jointly and severally with co-conspirators
The lesson
A "10% per month" return is 214% annualized. Real merchant cash advance shops earn high APRs on their loans, but they do not pay anywhere near that to capital providers — the spread funds operations, defaults, and profit. Any MCA fund pitching double-digit monthly returns is mathematically a Ponzi.
Primary evidence
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