Miami, Aug 30 – A 29-year-old man was arrested and charged in a federal court in South Florida with allegedly defrauding, together with his accomplices, more than 42 million dollars to investors through a pyramid scheme, reported Tuesday the Prosecutor’s Office of the Southern District of the state.
Pavel Ramón Ruiz Hernández, a resident of Pompano Beach, on the east coast of Florida, was charged with the crime of “conspiring to commit wire fraud through an investment Ponzi fraud scheme” linked to MJ Capital Funding.
According to the allegations, MJ Capital Funding was a Pompano Beach company that offered merchant cash advances, or MCAs, a type of short-term financing often used by small and medium-sized businesses.
The indictment states that in 2021 Ruiz Hernández and his accomplices “fraudulently solicited money from investors to finance MJ Capital Funding’s MCAs.”
In addition, the statement continues, Ruiz Hernández and his accomplices recruited others to solicit additional investors, generally paying the people recruited about 10% of the money they raised each month.
Ruiz Hernández and his accomplices lied to investors about the use of the funds by MJ Capital Funding. For example, Ruiz Hernandez told investors that they would use the money to fund MCA and that profits from MJ Capital Funding’s MCA business would fund investors’ returns, which was not true.
In fact, it is alleged that “MJ Capital Funding undertook little MCA and failed to make the profits it needed to pay investors’ returns or principal amounts.”
The Hispanic and his accomplices “paid investors by running a large Ponzi fraud scheme” that delivered money to investors “using new investor funds, while misappropriating millions of dollars,” a scam of more than 42 millions of dollars.
If convicted, Ruiz Hernández faces a maximum sentence of 20 years in prison.