U.S. Attorney: Florida resident charged in alleged MJ Capital financing Ponzi scheme

According to the allegations in the information, MJ Capital Funding was a Pompano Beach company that offered merchant cash advances, or MCAs, a type of short-term financing typically used by small and medium-sized businesses. The information alleges that from about March to August 12, 2021, Ruiz Hernandez and his co-conspirators fraudulently solicited money from investors to fund MJ Capital Funding's MCAs. It also alleges that Ruiz Hernandez and his co-conspirators recruited others to solicit additional investors, typically paying the recruits about 10% of the money they raised each month.

According to the information, Ruiz Hernandez and his co-conspirators lied to investors about MJ Capital Funding's use of investor funds. For example, Ruiz Hernandez told investors that they would use the money to fund MCAs and that the profits of MJ Capital Funding's MCA business would fund investor returns, which was not true. In fact, MJ Capital Funding made few MCAs and failed to earn anywhere near the profits it needed to pay the investor returns or principal amounts, it is alleged. As a result, the information charges that Ruiz Hernandez and his co-conspirators paid investor returns by running a large Ponzi fraud scheme, paying existing investors using new investor funds, while misappropriating millions of dollars for themselves. The information alleges Ruiz Hernandez and his co-conspirators defrauded investors of over $42 million.

Ruiz Hernandez made his initial federal court appearance today in federal magistrate court in Miami. If convicted, Ruiz Hernandez faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Robert M. DeWitt, Acting Special Agent in Charge, FBI, Miami Field Office, made the announcement.

FBI Miami investigated this case. Florida's Office of Financial Regulation and SEC Miami assisted. Assistant U.S. Attorney Eric E. Morales of the Southern District of Florida is prosecuting the case.

An information is a charging instrument containing allegations. A defendant is presumed innocent unless and until proven guilty in a court of law.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-20185.

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Original text here: https://www.justice.gov/usao-sdfl/pr/broward-county-resident-charged-alleged-mj-capital-financing-ponzi-scheme