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The United States District Court for the Southern District of Florida has appointed Bernice Lee as the Receiver over MJ Capital Funding, LLC, MJ Taxes and More, Inc., Pavel Ruiz MJCF LLC and UDM Remodeling, LLC (collectively, the “Receivership Entities”) in Case No. 21-61644-CIV-SINGHAL filed by the Securities and Exchange Commission against Johanna M. Garcia, MJ Capital Funding, LLC and MJ Taxes and More, Inc. The SEC’s Complaint alleges that Johanna M. Garcia used the defendant companies to perpetrate a Ponzi scheme by tricking investors into thinking they were funding loans to small businesses when in reality their “returns” were funded with money obtained from new investors. Links to the Complaint, Order appointing the Receiver, and other court documents are available under the “Court Documents” section on this page. The Receiver has been directed to take exclusive jurisdiction and possession of all assets of the Receivership Entities, and to exercise all powers of the officers, directors, managers and general and limited partners of the Receivership Entities, among other things. The Receiver has been engaged in the process of identifying and securing the Receivership Entities’ assets, investigating their operations and financial affairs, and identify the nature and scope of claims to be administered through this receivership proceeding.
FREQUENTLY ASKED QUESTIONS (FAQs):
How much money has been recovered?
As of June 30, 2025, the receivership estate has a balance of approximately $19.3 million, and the MJ Capital Wells Fargo settlement fund has a balance of approximately $21 million. These amounts will change based on initial distribution checks that are issued and deposited, expenses and fees paid, and additional amounts recovered.
What is the status of the Receivership estate’s claims process and distribution plan?
On May 1, 2025, the Court entered the Order Granting Receiver’s Motion for Approval of Distribution Plan and Initial Distributions (the “Distribution Order”) that granted the Receiver’s Motion for Approval of Distribution Plan and Initial Distributions (the “Plan”). During the month of July 2025, the Receiver issued more than 5,200 initial distribution checks to holders of allowed claims entitled to receive a distribution under the Distribution Order and Plan. On June 27, 2025, the Receiver sent an email notification to all investors entitled to receive an initial distribution (and who had not already submitted a change of address form to the Receiver) that provided their claim number, the mailing address used in their proof of claim form where the Receiver will mail the initial distribution check, and a change of address form with instructions on how to properly complete the form and a deadline of July 7, 2025 to submit such form. On July 21, 2025, the Receiver sent a follow-up email notification to over 3,350 investors, whose initial distribution checks would be issued by the Receiver later that week. In response, investors submitted more than 850 change of address forms. The Receiver is in the process of reviewing the change of address forms. She will be: (a) issuing initial distribution checks to holders of allowed claims entitled to receive a distribution who submitted a properly completed change of address form, and (b) sending follow-up emails to investors who submitted a deficient change of address form.
Please review the Distribution Order and Plan carefully. The Plan addresses the distribution of approximately $12.5 million to claimants with allowed claims on a pro rata basis using the Rising Tide methodology. Holders of allowed claims can look up the proposed initial distribution for their claim in Exhibit A by using their claim number. If you are a holder of an allowed claim and received no pre-Receivership disbursement, the initial distribution payment will provide a 21.397% recovery of your investment amount. If you are a holder of an allowed claim and received disbursements of between 0.2% and 21.33% of your investment pre-Receivership, the initial distribution payment will bring you up to the same 21.397% level of recovery. For example, if you invested $2,000 and received $200 in pre-Receivership disbursement, the $200 you received provided a 10% recovery of your investment, and the initial distribution payment of $227.94 will bring you up to the 21.397% recovery level. The Plan further provides that there are 3,683 holders of allowed claims who received pre-Receivership disbursements of 21.397% or more of their investments, and will not receive a payment under the Plan. The Receiver anticipates that many of the holders of allowed claims (but not all), including the claimants who received 21.397% or more of their investments, will receive a future distribution from the MJ Capital Wells Fargo settlement fund which is discussed below. There are also 56 disputed claims that are addressed in the Plan.
Please note that the foregoing addresses the Receivership estate funds and claims filed with the Receiver only. The Wells Fargo settlement fund and additional claims filed are discussed next.
What is the status of the MJ Capital Wells Fargo settlement fund’s claims process and distributions?
The Receiver serves as the Settlement Administrator for the MJ Capital Wells Fargo settlement fund. The settlement fund has approximately $21 million as of June 30, 2025. These funds are in addition to the funds in the receivership estate. Investors who did not file a proof of claim with the Receiver by the July 19, 2022 claims bar date were permitted to submit a claim to the Settlement Administrator by June 9, 2023 to request to participate in the Wells Fargo settlement. Investors who previously submitted a proof of claim to the Receiver by the July 19, 2022 deadline did not need to submit an additional claim to request to participate in the Wells Fargo settlement. A copy of the agreement, which includes the claims review and distribution procedures, can be viewed at www.mjcapitalclasssettlement.com under the Case Documents section.
Approximately 1,130 claim forms asserting a total of approximately $25.5 million were submitted to the Settlement Administrator under the additional claims process provided for the Wells Fargo settlement fund. The Settlement Administrator will be issuing rejection notices for many claims that are subject to disallowance, including but not limited to: (a) claims that are duplicative of allowed claims filed with the Receiver, (b) claims that are duplicative of claims rejected by the Receiver, (c) claims filed by claimants who received payments from the MJ Capital in excess of the amount of their principal investment, and (d) claims that fail to provide a copy of an investor agreement or any bank records in support of their claim. After the Settlement Administrator has completed the claims reconciliation and rejection process, the Settlement Administrator and her accountants will need to prepare the distribution schedule for the Wells Fargo settlement fund.
What is the status of Johanna Garcia’s criminal case?
On December 3, 2024, Johanna Garcia was sentenced to 240 months imprisonment in Case No. 23-20350 by U.S. District Court Judge Jose E. Martinez. The United States of America filed an Indictment against Johanna Garcia with 29 counts for Conspiracy to Commit Wire Fraud, Mail Fraud, Wire Fraud, Money Laundering, and for Forfeiture. Johanna Garcia pled guilty to Count 1. On March 5, 2025, the government filed a Restitution Stipulation in which the parties agreed that Garcia should be held liable for $65,802,500.
Will the brokers be investigated?
The Receiver has filed lawsuits against certain Board Members and over 125 promoters, which is further described in the Receiver’s interim reports available on the Court Documents page. Securities violation investigations are conducted by the Securities and Exchange Commission (“SEC”). The SEC has filed cases against Johanna Garcia, Pavel Ruiz, Christian Gonzalez, Nathalia Burgos, Christian Cuesta, Steven Fernandez and Monica O’Mealia, Erick M. Ruiz, Marco A. Rosas, Bryant Guayara, Karina N. Fernandez and Leonela M. Duarte. Criminal charges are investigated and brought by the Department of Justice, U.S. Attorneys Office. The U.S. Attorney has filed criminal actions against Johanna Garcia, Pavel Ruiz, and Christian Gonzalez.
Should I hire an attorney?
You have a right to be represented in this matter, however, we are unable to provide you legal advice.
LATEST UPDATES
- 7/30/25 Receiver’s Sixteenth Interim Report
- 7/29/2025 – During the month of July 2025, the Receiver issued more than 5,200 initial distribution checks to holders of allowed claims entitled to receive a distribution under the Order Granting Receiver’s Motion for Approval of Distribution Plan and Initial Distributions that approved the distributions set forth in the schedule attached as Exhibit A to the Receiver’s Motion for Approval of Distribution Plan and Initial Distributions. On June 27, 2025, the Receiver sent an email notification to all investors entitled to receive an initial distribution (and who had not already submitted a change of address form to the Receiver) that provided their claim number, the mailing address used in their proof of claim form where the Receiver will mail the initial distribution check, and a change of address form with instructions on how to properly complete the form and a deadline of July 7, 2025 to submit such form. On July 21, 2025, the Receiver sent a follow-up email notification to over 3,350 investors, whose initial distribution checks would be issued by the Receiver later that week. In response, investors submitted more than 850 change of address forms. The Receiver is in the process of reviewing the change of address forms. She will be: (a) issuing initial distribution checks to holders of allowed claims entitled to receive a distribution who submitted a properly completed change of address form, and (b) sending follow-up emails to investors who submitted a deficient change of address form. Please review the FAQs Section on this webpage for additional information and updates regarding the MJ Capital Wells Fargo settlement fund.
- 7/02/25 – The Court entered the Order Granting Receiver’s Motion for Approval of Distribution Plan and Initial Distributions on May 1, 2025, which approved the initial distributions set forth in the schedule attached as Exhibit A to the Receiver’s Motion for Approval of Distribution Plan and Initial Distributions. Please review the order and motion in detail. No timely appeal of the Order has been filed. In late June 2025, the Receiver sent an email to all holders of allowed claims scheduled to receive an initial distribution under the approved plan providing the address that the initial distribution check will be sent to, and the Receiver has received hundreds of responses and change of address forms. The Receiver is in the process of reviewing the responses and forms. Due to the volume of responses and forms, the Receiver intends to mail out the initial distribution checks on multiple dates during the month of July. Updates on the mail out dates will be provided on this website.
- 5/02/25 – The Court has entered the Order Granting Receiver’s Motion for Approval of Distribution Plan and Initial Distributions. The Receiver anticipates that the initial distribution checks will be mailed to holders of Allowed Claims in early July 2025. In the event there is an appeal of the Order, the timing of the distribution may be delayed. Updates regarding any appeal, and the date of the issuance of the payments will be provided on this website.The Court has also entered the Order Granting Final Judgment as to Defendant Johanna M. Garcia, which awarded the SEC $3,286,798.50 as disgorgement and $840,309.15 in pre-judgment interest, both of which sums are deemed satisfied by the $186,312,000 forfeiture order entered in Garcia’s criminal case.
- 4/30/25 – The Receiver has filed her Fifteenth Interim Report, and section III states in part that no objections have been filed with respect to the Receiver’s Motion for Approval of Distribution Plan and Initial Distributions and requests that the Court consider entry of the proposed order approving the motion. The Receiver intends to file a separate report for the Court that specifically addresses updates regarding the motion, the Receiver’s service of the motion, and investor inquiries regarding the timing of payment. Updates regarding any Court hearing for the plan, and status of the Court’s approval of the plan and distribution payments will be provided on this website once available.
- 2/27/25 – The Receiver is waiting for the Court to consider and enter an order on the Motion for Approval of Distribution Plan and Initial Distributions. Updates regarding any Court hearing for the plan, and status of the Court’s approval of the plan and distribution payments will be provided on this website once available.
- 1/30/25 – The Receiver has filed the Motion for Approval of Distribution Plan and Initial Distributions. Please review the motion and proposed distribution plan in detail. You will need your claim number to look up your claim in the proposed distribution schedule attached as Exhibit A.
- 1/30/25 – Receiver’s Fourteenth Interim Report
