Pavel Ruiz Hernandez already knew he would be losing his $115,000 sports car for his part in the MJ Capital Funding Ponzi scheme fraud, run out of a Pompano Beach strip mall.
On Tuesday, Ruiz learned he will lose up to nine years and two months of his life after being sentenced in Fort Lauderdale federal court on one count of conspiracy to commit wire fraud. The 30-year-old admitted costing investors $25 million, so that 110 months works out to one year for every $2.7 million ripped off by Ruiz.
Ruiz is in Broward County jail while awaiting his transfer to a federal prison facility. Another member of the MJ Capital gang, Pembroke Pines’ Christian Gonazlez, 41, is free until he surrenders before Oct. 30 to start serving his two-year, four-month sentence after being found guilty of two counts of money laundering.
In the downtown Miami federal prison sits Johanna Garcia, 40, accused of heading up the fraud. Magistrate Judge Jacqueline Becerra ordered Garcia be detained as a flight risk as she awaits trial after her indictment on one count of conspiracy to commit wire fraud and mail fraud, three counts of mail fraud, seven counts of money laundering and 18 counts of wire fraud.
Her jury trial is scheduled to begin Oct. 23.
The MJ Capital Funding Scheme
Ruiz’s guilty plea says “Co-conspirator 1” (Garcia) started working the Ponzi scheme through MJ Capital Funding and MJ Taxes and More in June 2020, and he signed on in March 2021. Ruiz’s job included hustling up new investors for commissions and supervising “managers” and “account representatives” doing the same. He also created “Pavel Ruiz MJCF LLC” to deal with the investors’ money.
The pitch told investors that MJ Capital Funding would provide short term loans to businesses called merchant cash advances (MCAs), “there was a team of underwriters that vetted merchant loan applicants, and that defaults were negligible so that the MJ Companies could guarantee investors capital.”
— MJ Capital Funding (@MJCapitalFundi1) June 30, 2021
Good concept. Bad lie.
As Ruiz guilty plea admits, the MJ Companies rarely used investors’ money, and that’s only one of the reasons they didn’t make much money from the MCAs. Ruiz, who Broward County online records say had been living in one of three small apartments in a 1979-built house, suddenly had enough money to buy a $115,000 2021 Audi RS7.
Ruiz’s guilty plea admits he lured at least $42,942,000 from investors, who lost more than $25 million. The MJ Companies paid earlier investors with money raised from later investors, a classic Ponzi scheme.