INVESTORS:

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 March 28, 2024, the receivership estate has a balance of approximately $14.6 million, and the Wells Fargo settlement fund has a balance of approximately $20.28 million. These amounts will change based on expenses and fees paid, and additional amounts recovered.

How many claims have been filed against the Receivership and Wells Fargo settlement fund?
In total, approximately 14,188 claims have been filed against the receivership estate and the Wells Fargo settlement fund for an estimated total of $264 million.

What is the status of the Receivership estate’s claims process and distribution plan?
For the 12,958 timely proofs of claim submitted to the Receiver by the July 19, 2022 bar date, the Receiver has issued 99% of all rejection notices for this set of claims. Claimants who receive a rejection notice have 60 days to submit a reconsideration letter to the Receiver, and the Receiver has 90 days to issue a final determination. There is an additional appeal process. The claims process is set forth in the Order Granting Receiver’s Motion to (I) Establish Bar Date for Claims; (II) Approve Form and Manner of Notice; (III) Approve Proof of Claim Form; and (IV) Approve Claim Submission and Administration Procedures [DE 125].

There are an estimated 100 late filed proofs of claim submitted to the Receiver after the July 19, 2022 bar date. The Receiver is reviewing these claims, and anticipates she will issue all rejection notices for this set of late filed claims in April 2024.

Once all rejection notices for the claims filed with the Receiver are resolved, the Receiver can finalize the initial pro rata distribution plan and submit the plan to the Court for approval. The initial plan will be both fair and reasonable. If you have a claim pending on the claims register that has not been rejected in its entirety, you will receive notice of the distribution plan when it is ready. As noted above, claimants have 60 days to respond to a rejection notice, and the Receiver has 90 days to issue a final determination. While the Receiver has been able to resolve nearly all requests for reconsideration within a few to sixty days after issuance of the rejection notices, at this time, she does not know if the same timing will apply to the most recent set of more than 900 rejection notices issued in late March 2024. Additional updates regarding the status of the remaining rejection notices, resolution of same, and the distribution plan will be provided on this website.

The Receiver’s team is processing hundreds of responses to rejection notices, and has encountered a variety of issues that require additional time, such as: (i) investors who provided their investment funds through a related person or entity but fail to provide the information in their claims or their initial responses to rejection notices, (ii) investors who deny receiving payments until they receive either a list of deposited checks, or in some instances, copies of checks they deposited, and (iii) investors who send multiple emails in response to rejection notices, which requires the Receiver’s team to sort through hundreds of emails to piece together the complete response.

The Receiver’s team has already eliminated tens of millions in improper claims and significantly reduced the amount of claims that will share in the pro rata distribution. The Receiver previously issued: (i) over 1,500 rejection notices to disallow an estimated $30 million in duplicative claims, (ii) over 690 rejection notices for an estimated $12.3 million in claims filed by promoters and those related to promoters or who received payments in excess of their investment, (iii) 2,840 rejection notices for claims that failed to account for over $10.3 million in payments received, and (iv) over 540 rejection notices for over $15 million in claims filed by claimants who provided insufficient information. Most recently, in late March 2024, the Receiver issued: (i) over 600 rejection notices for claims filed by claimants who provided insufficient information, (ii) over 340 rejection notices for claims filed by claimants who claims improperly inflate the amount owed or fail to account for payments received, and (iii) over 40 claims that are duplicative, filed by promoters or those related to promoters, or are otherwise improper.

What is the status of the Wells Fargo settlement fund ‘s claims process and distributions?

The Receiver serves as the Settlement Administrator for the Wells Fargo settlement fund. As noted above, the Wells Fargo settlement fund has approximately $20.28 million as of March 28, 2024. 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. For additional answers to general questions regarding the Wells Fargo settlement, please review the frequently asked questions on the webpage, or you may call this toll-free number 1-844-460-2134.

Approximately 1,130 claim forms were submitted to the Settlement Administrator under the additional claims process provided for the Wells Fargo settlement fund. The Settlement Administrator is in the process of reviewing, and will be issuing rejection notices for, claims that are duplicative, improper, unsupported, or otherwise subject to disallowance. After the Receiver’s distribution plan is approved by the Court (discussed above), and the Settlement Administrator has completed the claims reconciliation and rejection process for the 1,130 additional claim forms, the Settlement Administrator will issue the distributions from the Wells Fargo settlement fund.

Will Johanna face criminal charges?
Yes. The United States of America has filed an Indictment against Johanna Garcia (Case No. 23-20350) with Count 1 Conspiracy to Commit Wire Fraud and Mail Fraud, Counts 2-19 Wire Fraud, Counts 20-22 Mail Fraud, Counts 23-29 Money Laundering, and for Forfeiture. You can view the Indictment on the Court Documents page.

Will the brokers be investigated?
The Receiver is investigating various matters relating to the receivership estate, including fraudulent transfer claims. 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. Criminal charges are investigated and brought by the government. The United States of America 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 UPDATE FROM RECEIVER

  • 7/16/24 – Johanna Garcia has plead guilty to Count 1 of the Indictment in the United States of America’s criminal case against Johanna Garcia (Case No. 23-20350). You may view the plea agreement and her factual proffer on our Court Documents page. As of now, the date and time of Johanna Garcia’s sentencing hearing is Sep. 20, 2024 at 11:30 AM before U.S. District Court Judge Jose E. Martinez at Wilkie D. Ferguson, Jr. United States Courthouse, 400 North Miami Avenue, Miami, Florida 33128. Please check this website for updates and changes in the date and time of the sentencing hearing. Under the Crime Victims’ Rights Act, 18 USC Section 3771, victims have the right to be reasonably heard at Johanna Garcia’s sentencing hearing through a Victim Impact Statement. A Victim Impact Statement describes the emotional, physical, and financial impact you and your family have suffered as a direct result of the crime. If you desire to submit a written statement, please mail to: Roger Cruz, Assistant United States Attorney, 99 NE 4th Street, Miami, FL 33132, no later than September 6, 2024. Written Victim Impact Statements will be forwarded to the U.S. Probation Office to be included as part of the Presentence Investigation Report, and this report will be submitted to the judge prior to Johanna Garcia’s sentencing hearing. The judge is interested in knowing the impact this crime has had on you and your family. Your written statement allows the Judge time to consider your words prior to making a sentencing decision. Written Victim Impact Statements can be in a variety of different formats, depending on what feels most comfortable. Common formats include, but are not limited to: formal statements, personal narratives, or a written letter to the Judge. It is important to know that under criminal law and procedures, all information contained in your Victim Impact Statement must also be disclosed to the defendant and her attorney; however, personal identifying information such as the victim’s name is redacted. Although this statement is not mandatory, the hope is that the judge gives a strict sentence to the defendant in this case. Victims may also make an oral statement at the sentencing hearing. If you would like to speak at the sentencing, it is important to contact the U.S. Attorney’s Office Victim Witness Coordinator, Evelyn Cotto, Evelyn.cotto@usdoj.gov by September 6, 2024.
  • 7/8/24 – In the United States of America’s criminal case against Johanna Garcia (Case No. 23-20350), the Court has granted Johanna Garcia’s motion to continue Change of Plea Hearing, and set the hearing for July 16, 2024 at 11:30AM before the United States District Judge Jose E. Martinez
  • 6/23/24 – In the United States of America’s criminal case against Johanna Garcia (Case No. 23-20350), the Court has reset the Notice of Change of Plea Hearing to July 9, 2024 at 11:30AM before the United States District Judge Jose E. Martinez.
  • 6/14/24 – In the United States of America’s criminal case against Johanna Garcia (Case No. 23-20350), the Court has entered a Notice of Change of Plea Hearing, and set the Change of Plea Hearing for June 24, 2024 at 11:30AM before the United States District Judge Jose E. Martinez.
  • 4/30/24 – Receiver’s Eleventh Interim Report
  • 4/29/24 – In the United States of America’s criminal case against Johanna Garcia (Case No. 23-20350), Garcia filed a motion seeking to continue trial because Garcia’s counsel is attempting to reach a resolution with the government and working through the voluminous discovery. United States District Judge Jose E. Martinez entered an order granting the motion, and resetting trial to a two-week trial period starting June 3, 2024 at 9:30 AM, and scheduling the calendar call for May 30, 2024 at 1:30 PM. You can view the motion and order on the Court Documents page.
  • 3/28/24 – The Receiver has updated the FAQ section to address the status of the claims review and rejection process.  Please review.  A new quarterly report will be added to this website next month. In the Receiver’s lawsuit against certain board members and related companies, the Receiver has obtained default final judgments against Jose Cristobal Mendez and his four related companies, Carlos Rivillas and his related companies, Christian Cuesta and his related company, and Mario Morales and his related company. The Receiver has also obtained the entry of clerk’s default against Marco Rosas and his related entities and Joel Castellanos, and filed a motion for consent judgment against Bryant Guayara and his related company. These can be viewed on the Court Documents page.
  • 2/21/24 – In the United States of America’s criminal case against Johanna Garcia (Case No. 23-20350), Garcia filed a motion seeking to continue trial by 60 days due to extremely voluminous discovery and because Garcia’s counsel has started to discuss with the government the possibility of a resolution short of trial. United States District Judge Jose E. Martinez entered an order granting the motion in part, resetting trial to a two-week trial period starting April 8, 2024 at 9:30 AM, and scheduling the calendar call for April 4, 2024 at 1:30 PM. You can view the motion and order on the Court Documents page.
  • 1/22/24 – In the United States of America’s criminal case against Johanna Garcia (Case No. 23-20350), Garcia filed a motion to continue trial and associated deadlines. On January 22, 2024, United States District Judge Jose E. Martinez entered an Order that reset the calendar call to Thursday, February 22, 2024, at 1:30 p.m., and reset the trial to a two-week trial period starting on Monday, February 25, 2024, at 9:30 a.m. (see Court Documents page).
  • 1/17/24 – The Receiver has updated the FAQ section to address the status of the claims review and rejection process.  Please review.  A new quarterly report will be added to this website next month. The Receiver filed a complaint against certain board members and related companies asserting fraudulent transfer and unjust enrichment claims (see Court Documents page).