MJ Capital Funding: The Investors Supplied the Returns

MJ Capital Funding raised over $196 million from thousands of investors in a Ponzi scheme, according to the Securities and Exchange Commission’s Enforcement Division. Its motion describes a business that promised merchant cash advances but used most investor funds for earlier investors, sales commissions and personal expenses. If you handled the investment agreements, merchant funding or commission payments, you may recognize the gap between the business sold to investors and the business recorded in the accounts.

This page follows MJ Capital Funding’s offering, sales network and payment trail through the civil and criminal records. Our Ponzi schemes overview explains the underlying pattern, while our page on trade finance, factoring and consumer lending schemes compares other businesses built around promised borrower payments.

The Merchant Cash Advance Pitch

MJ Capital Funding presented merchant cash advances as the business that would generate investors’ returns. The Justice Department’s account of the indictment identifies the company as a Pompano Beach, Florida business offering short-term financing typically used by small and medium-sized businesses. The Securities and Exchange Commission alleged that MJ Capital Funding and MJ Taxes and More told investors their money would fund that lending and promised annual returns of 120% to 180%.

The Enforcement Division’s motion describes what the pitch looked like on paper. Investors signed merchant cash advance agreements that identified them as purchasers, committed a fixed sum to the purported business and promised monthly returns with eventual repayment of principal. Sales agents signed the agreements. The claimed business would advance money to other companies in exchange for a portion of their business income over time.

The investor supplies capital, the merchant uses the financing, and the merchant’s payments are supposed to support the investor’s return. Someone working on merchant approvals or collections may know whether those receipts ever arrived. Someone working on investor payments may know which account actually supplied them.

The Payments Outgrew the Lending

The Securities and Exchange Commission’s announcement said its original complaint alleged that the companies made at most $2.9 million in merchant cash advance loans and earned very little revenue. It alleged that at least $20 million of new investor money instead paid purported returns to existing investors. Another $27.4 million allegedly went to other entities, with a substantial portion paid to sales agents for promoting the investments.

The later Enforcement Division motion supplies another comparison. It says the companies used around $588,561 of investor funds for their merchant cash advance business. The same motion says one board member and his sales team collectively received around $19 million in commissions. We see a sales business wearing a lending label.

If you handled investor payments, you may know where the money behind a promised return actually came from. A ledger may call a transfer an investment return, but the merchant repayment and the incoming investor deposit tell different money stories. In the Justice Department’s account of the former chief executive’s guilty plea, the company made few loans and failed to earn anywhere near the profits needed for the promised payments. New investors supplied the money paid to existing investors.

The Sales Network Left Its Own Records

The Enforcement Division’s motion describes a board member who led about forty sales agents, recruited investors through calls, emails and social media, and received commissions based on the investors he brought in. It identifies internal board-member lists, a sales roster, executed investment agreements and a company credit-card statement among its supporting exhibits. The motion says investor funds paid both his commissions and his personal credit-card purchases.

Those records connect different parts of the operation. A sales roster identifies who supervised the person making the pitch. A signed agreement connects that pitch to an investor, while the commission payment shows who was paid when the investment arrived. If you worked in sales or accounting, you may know how those relationships were recorded and who approved the payments.

A separate Securities and Exchange Commission action announced in February 2026 concerned another sales-team leader. The Commission alleged that he and about 42 sales agents raised at least $25.2 million from at least 1,222 investors. It charged unregistered securities sales and unregistered brokerage activity, alleging that the leader earned commissions despite having no broker registration or association with a registered broker-dealer.

This is why promoter and gatekeeper records can matter alongside the issuer’s books. The agreement, sales message and commission instruction can show who made a representation, who repeated it and who benefited from the investment it produced.

The Criminal Record Explains the Same Payment Loop

The Justice Department’s guilty-plea announcement says the former chief executive pleaded guilty to conspiring to commit mail and wire fraud. Its account of the criminal court records describes recruiting people to solicit investors, paying recruiters commissions, falsely promising returns from merchant cash advance profits and using new investor funds to pay existing investors. FBI Miami investigated, with assistance from the Securities and Exchange Commission’s Miami Regional Office and Florida’s Office of Financial Regulation.

The Justice Department also reported a recruiting co-conspirator’s guilty-plea admission that he and others fraudulently obtained investor funds. Its account of that criminal case says recruits typically received 10% of the funds they raised, tying their compensation to new investment.

The chief executive’s guilty-plea announcement also describes a continuation of the commercial-loan pitch after MJ Capital Funding was shut down. According to the criminal court records it recounts, participants used companies including New Beginning Global Funding and New Beginning Capital Funding to solicit money supposedly for commercial loans. The money instead paid previous investors and personal expenses. For someone who saw investment money move between company names, the continuity of the pitch and the payment instructions may explain more than the new name on the agreement.

Civil Orders Against the Companies and Sales Participants

The Securities and Exchange Commission obtained an asset freeze and appointment of a receiver in its emergency action against the MJ companies. Its February 2026 release also describes a civil consent judgment against the former chief executive barring her from serving as an officer or director.

The sales participants had separate civil proceedings. The Enforcement Division’s motion describes a final judgment against the board member that included a $200,000 civil penalty and restrictions against future registration violations. For the other sales-team leader, the February release described a proposed judgment with a $150,000 civil penalty.

What Someone Inside the Business Can Add

The MJ Capital records make the value of firsthand knowledge concrete: who signed the investment agreement, what the salesperson promised, whether a merchant received funding and where the investor payment came from. We connect that knowledge to the contracts, account entries and payment instructions that explain the transaction. You may know one part of that sequence particularly well.

A 2018 study in the Journal of Forensic & Investigative Accounting, The Significance of Whistleblowing as an Anti-Fraud Measure, found that whistleblowing was more likely to be the detection method as more people participated in the occupational frauds it studied. In this case, the sales agreements, team rosters and commission records provide concrete places to connect a person’s knowledge to the wider operation.

Investor recoveries and whistleblower awards serve different purposes. An investor’s financial loss and an insider’s information about the offering are different starting points for our work with them.

The SEC whistleblower program can pay eligible whistleblowers 10% to 30% of qualifying sanctions collected when the enforcement action’s monetary sanctions exceed $1 million. We assess that opportunity with you through what you know about the investment and its actual use of money. For conduct involving false claims for government money, a whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Who Funded the Payment

If you handled merchant funding, investor payments or sales commissions and saw a different business from the one being sold, talk with our whistleblower experts about what you saw. We build your strongest case with you, bring in securities fraud whistleblower lawyers who understand investment offerings and the money behind their returns, and stay beside you through the process.