Crime Fix with Angenette Levy - Florida's 'Mother Teresa' Really Had Thousands of Victims

Starting point is 00:00:00 Wondery Plus subscribers can binge all episodes of this Law & Crimes series ad-free right now. Join Wondery Plus in the Wondery app, Apple Podcasts, or Spotify. A Florida woman known as the Mother Teresa of her community turns out to be a fraud. I'll tell you about Johanna Garcia and how much money she's admitted to stealing. Welcome to Crime Fix, I'm Anjanette Levy. Johanna Garcia appeared to have everything going for her. She was the CEO of an investment firm, MJ Capital Funding, in Broward

Starting point is 00:00:31 County, Florida. But federal prosecutors say Garcia's business was a sham and that she swindled investors out of more than $190 million. Johanna Garcia pleaded guilty to conspiracy to commit mail and wire fraud through her company, MJ Capital Funds. The 28 other counts from her indictment were dismissed. It turns out these miracle investments were so profitable because of the fake capital funding group. On top of the 240 months in prison, the Southern District of Florida judge sentenced Garcia to three years of supervised release, a $100 special assessment, and additional restitution. According to prosecutors, Garcia and her co-conspirators sought out investments from high-cost loans to engage in merchant case advances, or MCAs, which is a type of short-term financing by small businesses, using new investor funds while

Starting point is 00:01:23 misappropriating millions of dollars for her own personal benefit. The operation consisted of recruiting people to solicit investors and then incentivizing those recruiters with commissions. The recruiters enabled Garcia and her co-conspirators to enter into written investment agreements with investors. The investment agreements made materially false and fraudulent statements and representations to investors, mainly concerning the use of investor funds and the source of investor returns, so they could receive MJ Capital investor funds in cash and through deposits via check and electronic bank transfers, often involving interstate wire communications and mailings, into accounts, including Garcia's personal accounts and accounts in the name of MJ Capital, MJ Taxes, and MD Enterprise.

Starting point is 00:02:11 Essentially, the Ponzi scheme was organized in a way that allowed Garcia and her co-conspirators to pay existing investors using new investor funds. At one point, investors of MJ Capital filed a multi-million dollar lawsuit against Wells Fargo, claiming they were responsible for preventing the fraud. Wells Fargo paid $26.6 million to settle the suit. That same year, the FBI and Securities and Exchange Commission investigated MJ Capital, and they discovered the funding operation and shut it down. But it didn't take long for the band to get back together, starting a new Ponzi scheme with other entities. This time, Garcia and her partners told new investors

Starting point is 00:02:51 they were funding commercial loans. In reality, that money was used to pay off their previous investors and fund the schemers' lifestyles. According to court documents, Garcia and her co-conspirators misappropriated millions of dollars to court documents, Garcia and her co-conspirators misappropriated millions of dollars to pay for, among other things, personal expenses, luxury goods, vehicles, vacations, entertainment, and to make personal investments. Before the plea, Garcia's attorneys tried to claim her co-conspirator, Ruiz Hernandez, was the real mastermind. But prosecutors had

Starting point is 00:03:23 overwhelming evidence that Garcia was actually in charge and calling the shots until her arrest, even while she was in the custody of the Bureau of Prisons. She was sentenced, as I mentioned earlier, to 240 months in prison. That's 20 years. Ruiz Hernandez pleaded guilty to the same charges in April of 2023. He was sentenced to 110 months in prison, followed by three years of supervised release. I want to bring in Nima Rah 2023. He was sentenced to 110 months in prison, followed by three years of supervised release. I want to bring in Nima Rahmani. He is a former federal prosecutor. Nima, I find this case to be shocking. I find it so shocking because we've had so many people in the past who've been found guilty of running Ponzi schemes, Bernie Madoff, big names like that. It's like people never learn. And we've

Starting point is 00:04:07 got this woman, Johanna Garcia, admitting to running a Ponzi scheme where she swindled people out of $190 million. It's just an astronomical sum of money. And Jeanette, really, it's a tale as old as time. You have fraudsters and with the Ponzi scheme, the only difference is they're really kind of robbing Peter to pay Paul. They continue this lifestyle by getting money from new investors to pay off old ones. But ultimately, it ends up crumbling. And like you said, there's Madoff. Obviously, a big case recently was FTX. Sam Bankman Freed was a massive fraud case as well.

Starting point is 00:04:47 But you see individuals who really are brazen in what they do. And, you know, they defraud folks to fund their own lavish lifestyles. The cases I cover each day here on Crime Fix show you just how scary the world can be. And one of the scariest things that can happen is if you ever get hurt. But I want you to know if you're ever seriously hurt or in an accident, your case could be worth millions. And that's where Morgan & Morgan comes in. The firm has more than 1,000 lawyers who will fight for what you deserve, and they have the track record to prove it. In the past few months, Morgan & Morgan has won big verdicts like $12 million in Florida, $26 million in Philly, and $6.8 million in New York. All of those were much higher than the highest insurance company offer.

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Starting point is 00:06:13 They can't. And usually what will happen is you'll start seeing civil lawsuits. Investors haven't been paid. Or in this particular case, it started with an SEC investigation. Right. or in this particular case, it started with an SEC investigation, right? And then when people start digging, whether it's through civil discovery or some administrative process, they realize that it's all a scam and the business is not legitimate. And I think what makes this particular case unique is that even after she was raided and shut down, essentially, she created a whole new Ponzi scheme and she was running the scheme from prison. I mean,

Starting point is 00:06:50 that's something that you don't typically see, Anjanette. Yeah. And that was the thing that really shocked me about this one. You get in trouble, the SEC shuts you down, you're done. And yet they say she sets up a new operation. I mean, that takes things to a whole new level. You would think that she would be shocked. You might get scared straight a little bit, but no. They said she just kept on keeping on. So that's what's so shocking to me. And I think that's why she got 20 years in prison. I think that's right. And obviously, look, when you're dealing with fraudsters, they have no problem lying. But sort of the, you know, the arrogance here when, you

Starting point is 00:07:32 know, the feds are on you. And we've seen this before, you know, in the Matthew Perry case, right? We have someone who kills someone with ketamine, is raided by the feds. This is a Jasmine Songa, the ketamine queen, and still continues to sell drugs. So criminals are going to criminal. But I think you're right in terms of why she got the 20 years. And for folks that don't know, that's the max for a wire fraud type case. It's because of that brazenness, right? You don't get 240 months if not for the amount of the fraud. And the sentencing guidelines, of course, take that amount into consideration. So when you have a $190 million fraud, and at least $90 million of which was actually lost by investors, that pushes those sentencing

Starting point is 00:08:21 guidelines through the roof. And then when you have someone that continues to commit fraud, even after she's raided and in custody, that's something that judges don't look favorably upon. One of the things that I found interesting in looking at some of the reporting on this case, 7 News out of Miami, they said there were 15,000 investors, 15,000. That is an astronomical number to me. Some of these people, Nima, were so trusting and they invested all of their money in her company. And so these are some people that lost everything. It was all their money that they had. That's the sad part about this. And then one guy, his name was Steven Schulman. He was quoted as saying that everything was good for like six months. And that's kind of how these things begin. And he said, just like that, the person delivered the check every month on the exact same

Starting point is 00:09:16 day, you know, because she was getting new money to replenish the money she was taking. And the check that I was supposed to get didn't show up one day. I tried to call the next day, the next day, no answer. Then I looked up and realized they were busted by the FBI and the SEC is a Ponzi scheme. And so he had given her $50,000. Obviously other people probably lost even more. But there were probably people, there were people who lost everything. I don't know how people, I mean, how do you check these places out? I would assume you need to just do your research into these places, see that they're insured by the FDIC. You need to, and there are other organizations that insure them and see that they've been around a while and that they are reputable.

Starting point is 00:10:04 Well, that's right. I mean, these are risky investments. You're talking about individuals that were promised a 20% rate of return. That's a lot. So if something sounds too good to be true, it probably is true. And this is not like opening a CD at your bank. I mean, this is much more risky than investing in the stock market or crypto, right? So not someone that has a long, really established reputation. And I think what happens is these fraudsters, obviously, they're good liars. They're good salespeople. And they deliver something in the beginning that seems too good to be true. So people tell their friends they invest.

Starting point is 00:10:43 And ultimately, it's a big scam. So you gotta be really careful when you're approached with these types of schemes because oftentimes they're not legitimate. Yeah, most certainly. Another thing that struck me about this as well is that they say that she tried to kind of like pin this on her co-defendant.

Starting point is 00:11:03 Obviously the co-defendant pleaded guilty before she did, but it sounds like she was almost trying to act like this was all like his idea and that he was kind of the patsy, that he was the real mastermind behind this when it was all her. I find that to be pretty interesting, especially when he pleaded guilty first that happens a lot in these fraud cases because obviously it's very difficult to say that the business was legitimate so you'll see even the head of the organization the ceo the president pointing the finger at someone oh i didn't know what was going on it was my cfo was my accountant we've seen this time and time again look at elizabeth holmes right in her case big fraud case she she tried to point the finger know what was going on. It was my CFO, it was my accountant. We've seen this time and time again.

Starting point is 00:11:45 Look at Elizabeth Holmes, right? In her case, big fraud case. She tried to point the finger at her COO, Sonny Balwani, Enron. Any case you can imagine, there's always the defense that I didn't know it wasn't me. I too was the victim. I believed in this company. It turns out that these people I was working with, they're the real scammers. Well, jurors aren't stupid. Judges aren't stupid. And they can see through those arguments pretty quickly. And that one victim I mentioned earlier, he doesn't think he'll get any money back. And 7 News out of Miami, they're reporting that her defense attorneys told them that there's a receivership assigned to the case and they said they'd recovered about a third of the misappropriated funds. Obviously, they're probably, the receivership is still

Starting point is 00:12:31 trying to recover more, but a lot of that money may be spent. It may be gone. How often it is. And there are receivers appointed. And I'm talking about different cases, FTX, for instance, they've had some success in getting the more than a billion dollars that was defrauded in that case back. But you're right, it's really pennies on the dollar when you're talking about what the victims are getting. If they get anything at all, they should be happy. Criminal restitution is a part of any case. I don't know how much money she still has, but I would be surprised if these investors get anything near even the principle of their initial investment. You know, I've covered a few of these cases in the past. It's not something, you know, you see a lot, but there are really a lot of things people can do to make sure, you know, don't put all your money in like don't put all your eggs in one basket.

Starting point is 00:13:24 You know, that old saying is so true, diversify your investments, but really, really, you have to do your research when you're investing with somebody and, and, you know, someplace that just crops up like MJ Capital Funding, probably not the best place to put your money. Yeah, no question. Diversification is important in any investment strategy. And certainly don't invest more than you can lose because even though it's an investment, it's still somewhat of a gamble. And of course, you got to be careful, right, where people are promising. You got to do your own research. You got to vet it because there's always the possibility, unfortunately, that someone is lying to you just to get your money. Undoubtedly, no doubt. It is just awful. Nima Rahmani, thank you so much for joining me. I really appreciate it. Thanks for having me, Anjanette, as always. And that's it for this episode of Crime Fix. I'm Anjanette Levy. Thanks so much for being with me. I'll see you back here next time.

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Crime Fix with Angenette Levy - Florida's 'Mother Teresa' Really Had Thousands of Victims

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Crime Fix with Angenette Levy - Florida's 'Mother Teresa' Really Had Thousands of Victims

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