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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):

When will I receive a distribution?
The Receiver’s team is in the process of reviewing and reconciling thousands of claims in order to safeguard victim investors against duplicative and improper claims. Over 12,900 proofs of claim were filed by the July 19, 2022 claims bar date. The Receiver has issued over 1,300 rejection notices for duplicative claims totaling over $26 million. In addition, the Receiver has issued over 2,300 rejection notices for claims that failed to account for over $7.5 million in payments received from the Receivership Entities. The Receiver will be issuing many more rejection notices for claims that fail to account for payments received and other improper claims. If you receive a rejection notice, you will have an opportunity to respond. The Receiver needs to complete the claims rejection process before she can prepare the distribution plan. The distribution plan will be subject to court approval. The Receiver is unable to provide a specific time frame as to when distributions will be made. Updates will be provided on this page to address the status of the distribution plan.

What is the status of the MJ Capital Class Settlement with Wells Fargo?
The Court entered the Final Order and Judgment Approving Settlement and Attorneys’ Fees on July 5, 2023. The Order is available in the Court Documents section. The Receiver is serving as the Settlement Administrator for the Wells Fargo settlement fund, which has approximately $20 million as of September 14, 2023. These funds are in addition to the funds the Receiver has recovered for the receivership estate that are detailed in the Receiver’s interim reports under the Court Documents section. 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. Over 1,100 additional claims were submitted to the Settlement Administrator. The Settlement Administrator needs to complete the review and reconciliation of these additional claims, and the Receiver needs to complete the review and reconciliation of the proofs of claim filed with the Receiver, before the Settlement Administrator can determine the distribution of the Wells Fargo settlement funds. A copy of the settlement 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.

What percentage of my investment will I get back?
It is too early to know the percentage. Information will be provided in the distribution plan discussed above.

Will I have to give back the money I earned as interest – even if I have not received my principal back?
The Receiver will determine and propose a distribution plan for claimants that is both fair and reasonable, and takes into account funds provided and payments received. 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. For additional information regarding the claims administration process for the receivership estate, please review the Order Establishing Bar Date and Approving Claim Submission and Administration Procedures available in the Court Documents section. For information regarding the claims administration process for the Wells Fargo settlement fund, please review the settlement agreement available on the Case Documents section at www.mjcapitalclasssettlement.com.

How much money has been recovered?
For money recovered by the Receiver, please review the Receiver’s interim reports located on the Court Documents section. For the Wells Fargo settlement fund, the fund has approximately $20 million as of September 14, 2023.

Will Johanna face criminal charges?
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 section.

Will the brokers be investigated?
The receiver will be investigating various matters relating to the receivership estate. Securities violation investigations are conducted by the Securities and Exchange Commission (“SEC”).  In addition to Johanna Garcia, the SEC has filed cases against Pavel Ruiz and Christian Gonzalez. 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

  • 11/22/23 – In the United States of America’s criminal case against Johanna Garcia (Case No. 23-20350), Garcia filed a motion for reconsideration and rehearing on the issue of her pretrial detention. On November 16, 2023, the United States of America filed its response in opposition to the motion outlining Garcia’s conduct that the court should consider to deny the motion. United States Magistrate Judge Jacqueline Becerra conducted a hearing on November 17, 2023, and denied the motion. Garcia remains in jail. You can view the motion and the government’s response on our Court Documents page.
  • 10/30/23 – Receiver’s Ninth Interim Report
  • 10/23/23 – 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 120 days. On October 16, 2023, United States District Judge Jose E. Martinez entered an order granting the motion in part, resetting trial to a two-week trial period starting December 4, 2023 at 9:30 AM, and scheduling the calendar call for November 30, 2023 at 1:30 PM. You can view the motion and order on our Court Documents page.
  • 9/26/23 – The Securities and Exchange Commission has filed three new civil cases against four individuals involved with MJ Capital. The SEC filed a complaint against Nathalia Burgos (Case No. 23-61818) alleging violations of Sections 5(a) and (c), 17(a)(1), (a)(2) and (a)(3)  of the Securities Act, and Sections 10(b) and Rule 10b-5(a) of the Exchange Act, and seeking permanent injunctive relief, disgorgement and civil penalties. The SEC filed a complaint against Christian Cuesta (Case No. 23-61817) alleging violations of Sections 5(a) and (c) of the Securities Act, and Section 15(a)(1) of the Exchange Act, and seeking permanent injunctive relief, disgorgement and civil penalties. The SEC filed a complaint against Steven Fernandez and Monica O’Mealia (Case No. 23-61816) alleging violations of Sections 5(a) and (c) of the Securities Act, and Section 15(a)(1) of the Exchange Act, and seeking permanent injunctive relief, disgorgement and civil penalties. Steven Fernandez and Monica O’Mealia agreed to the entry of final judgments.
  • 9/20/23 – In the criminal case brought by the United States of America against Pavel Ruiz (Case No. 22-20400), U.S. District Court Judge Rodney Smith held the sentencing hearing on September 19, 2023, and sentenced Pavel Ruiz to imprisonment of 110 months, and 3 years supervised release. Pavel Ruiz had plead guilty to Count I of the Information for Conspiracy to Commit Wire Fraud.
    In the criminal case brought by the United States of America against Johanna Garcia (Case No. 23-20350), U.S. District Court Judge Jose E. Martinez has scheduled trial to commence during the two-week period beginning October 23, 2023 at 9:30 a.m., and the Calendar Call for October 19, 2023 at 1:30 p.m.
  • 9/14/23 – In the United States of America’s criminal case against Pavel Ruiz (Case No. 22-CR-20400), the court has reset the date and time of Pavel Ruiz’s sentencing hearing to September 19, 2023 at 10:00 AM before U.S. District Court Judge Rodney Smith at U.S. Federal Building and Courthouse, 299 East Broward Boulevard Courtroom 202B, Fort Lauderdale, Florida 33301. Please continue to check this website for additional updates regarding the date and time of the sentencing hearing.
  • 9/6/23 – The sentencing hearing for Pavel Ruiz scheduled for September 7, 2023 at 9:30 AM has been CANCELLED and will be reset to another date. U.S. District Court Judge Rodney Smith entered a paperless order in the United States of America’s criminal case against Pavel Ruiz (Case No. 22-CR-20400) this afternoon stating that the U.S. Marshal’s Office has notified the Court that Pavel Ruiz is in quarantine at the jail, and the sentencing hearing will be reset by separate notice. Once the notice is issued, this webpage will be updated. Please continue to check this website for additional updates regarding the date and time of the sentencing hearing.
  • 9/1/23 – In the United States of America’s criminal case against Christian Gonzalez (Case No. 22-CR-20563), on June 12, 2023, the jury found Christian Jose Gonzalez guilty on two counts of money laundering for a transaction of proceeds of unlawful activity of a withdrawal of $159,936 and deposit of $155,000. On August 31, 2023, Christian Jose Gonzalez was sentenced to imprisonment of 28 months as to Count 1, 2, terms to run concurrently, followed by 3 years of supervised release as to Count 1, 2, terms to run concurrently with special conditions. He is to surrender to a designated facility on October 30, 2023. The Judgment in a Criminal Case can be viewed here.
  • 8/25/23 – 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. A detention hearing to determine whether she will be released on bond or detained pending trial is scheduled for Monday, August 28, 2023 at 1:30 PM before United States Magistrate Judge Jaqueline Becerra at the James Lawrence King Federal Justice Building, 99 N.E. Fourth Street, 10th Floor, Miami, Florida 33132. You can view the Indictment here.
  • 8/25/23 – Johanna Garcia was arrested this morning. Her initial appearance is today, August 25, 2023, at 2:00 PM before the United States Magistrate Judge Eduardo I. Sanchez at the C. Clyde Atkins U.S. Courthouse, 301 North Miami Avenue 6th Floor, Miami, Florida 33128. Additional information will be provided soon.

COURT DOCUMENTS



CLAIMS ADMINISTRATION PROCESS

The deadline to submit a proof of claim form and supporting documentation passed on July 19, 2022 at 11:59 p.m. (prevailing Eastern Time). The Receiver is in the process of reviewing approximately 12,950 timely filed proofs of claim and documents. Please be patient.  If the Receiver rejects your proof of claim, in whole or in part, you will receive a Rejection Notice and you will have an opportunity to respond. For additional information regarding the Claims Administration Process, please review the Order Establishing Bar Date and Approving Claim Submission and Administration Procedures: link.