00:00.000 --> 00:03.900
Sean Murray: So there's a
company called MJ Capital Funds.

00:03.900 --> 00:06.600
This story is literally pretty
fresh. Yeah. Like just happened.

00:06.600 --> 00:08.280
Johny Fernandez: Just happened
in like the last 20 minutes.

00:08.280 --> 00:10.760
Sean Murray: Yeah, we found out
about in the last 20 minutes. So

00:10.760 --> 00:15.680
there's a company down in South
Florida called MJ Capital and MJ

00:15.680 --> 00:19.700
Capital was just charged by the
Securities and Exchange

00:19.700 --> 00:24.380
Commission with committing a
very large Ponzi scheme. So the

00:24.380 --> 00:30.110
charges are securities fraud.
And it's alleged that the owners

00:30.140 --> 00:33.440
took or the owner owners I'm not
sure exactly, they allege they

00:33.440 --> 00:34.160
put one person.

00:34.160 --> 00:35.240
Johny Fernandez: They put one
person's name.

00:35.300 --> 00:38.960
Sean Murray: One person's name,
and it's alleged that she took

00:38.960 --> 00:45.320
in between what was it 70 to
$120 million from investors in

00:45.320 --> 00:50.480
under one year's time. And what
she claimed she was doing with

00:50.480 --> 00:54.800
the money was that she was
making MCA's and small business

00:54.800 --> 00:57.920
loans. So we went to the
website, we checked them out

00:57.920 --> 01:00.860
online, right before we came on.
Yep. Right. And it looked like

01:01.040 --> 01:04.220
you're run of the mill shop that
we would normally report on,

01:04.250 --> 01:07.370
business lender MCA, we buy
future receivables we'll fund

01:07.370 --> 01:09.680
your business, all that stuff,
right? It's everything like

01:09.710 --> 01:12.410
normal. Yeah. As far as that we
could tell. Yeah. Right. We went

01:12.410 --> 01:14.090
to the Instagram, went to the
Twitter.

01:14.120 --> 01:17.150
Johny Fernandez: Everything
looks legitimately normal.

01:17.150 --> 01:19.010
Sean Murray: Yeah, like this
wasn't a company that was like,

01:19.250 --> 01:21.770
where you didn't know who the
owners were, you know, super

01:21.770 --> 01:24.260
shady, you couldn't reach them,
they seem to be like, embedded

01:24.260 --> 01:27.020
with like charities and stuff.
And, you know, there it seemed

01:27.020 --> 01:30.890
they were very public facing.
That was the impression I got

01:31.220 --> 01:36.650
from looking at it. And lo and
behold, according to the SEC,

01:36.650 --> 01:40.310
they weren't really putting
money into deals. In fact, the

01:40.310 --> 01:44.750
SEC said they only took they
only used 2.9 million of the 100

01:44.780 --> 01:48.260
some odd million they collected
to actually fund businesses. And

01:48.260 --> 01:52.730
that the rest went other places,
right, to different bank

01:52.730 --> 01:56.750
accounts, entities controlled by
the owner, paying like broker

01:56.750 --> 02:00.890
commissions and so forth, wasn't
exactly made clear where all the

02:00.890 --> 02:03.800
money went, or how much is still
there. It did mention something

02:03.800 --> 02:06.740
about cash withdrawals that the
owner was using to taking some

02:06.740 --> 02:09.470
money out of the ATM. I don't
know how you take 100 million

02:09.470 --> 02:10.220
out of the ATM.

02:10.340 --> 02:12.590
Johny Fernandez: To backtrack
real quick regarding the story

02:12.620 --> 02:17.450
down in South Florida. For those
who don't know, what exactly is

02:17.450 --> 02:21.320
a Ponzi scheme, and what what is
a Ponzi scheme?

02:21.330 --> 02:23.220
Sean Murray: Okay, yeah, that's
a good question. What is a Ponzi

02:23.220 --> 02:24.930
scheme, it's one thing to of
lead somebody's running a Ponzi

02:24.930 --> 02:27.810
scheme, you know what what the
heck is a Ponzi scheme, all

02:27.810 --> 02:31.140
right, so a Ponzi scheme is when
you're taking money from new

02:31.140 --> 02:35.430
investors to paying back old
investors. So in a Ponzi scheme,

02:35.460 --> 02:39.900
you're not actually investing
the money, so to speak, you're

02:39.900 --> 02:42.270
giving the illusion that the
money that's been invested is

02:42.300 --> 02:45.450
earning a return. The problem is
that at some point, you're gonna

02:45.450 --> 02:48.720
have to prove it, right. Because
if you're the first investor in

02:48.720 --> 02:52.230
a Ponzi scheme, let's say you
put in 100 grand, and you were

02:52.230 --> 02:55.740
promised that your 100 grand has
earned 20 grand, at some point,

02:55.740 --> 02:59.550
you're gonna be like, That's
awesome. I'll take my 120k right

02:59.550 --> 03:03.360
now, right. And if you don't
want the scheme to blow up right

03:03.360 --> 03:06.300
out of the gate, well, you're
gonna have to come up with 120k

03:06.930 --> 03:09.360
as proof that everything worked,
even though you didn't do

03:09.360 --> 03:11.910
anything with the money, or you
tried and it failed, or

03:11.910 --> 03:15.840
whatever, right. So what you do
in a Ponzi scheme is you then

03:16.170 --> 03:19.710
raise money from new investors
and say, hey, I'll borrow, you

03:19.710 --> 03:22.410
know, I'll raise 500k from you,
I'll take a million from you,

03:22.410 --> 03:25.260
I'll take 100k from you, right.
And then you take from that

03:25.260 --> 03:28.230
money, you take 120k, and you
give it to the first person,

03:28.560 --> 03:32.940
they get their 120k. It serves
as proof that this that

03:32.940 --> 03:36.240
everything is legitimate,
because the first guy got paid

03:36.240 --> 03:40.440
out his initial investment, plus
a nice hefty return. And now all

03:40.440 --> 03:42.510
these other people are like,
whoa, did you hear so and so

03:42.720 --> 03:46.860
turned his 100k into 120k, and
they got paid out, it's legit,

03:46.890 --> 03:49.290
this person is not going to
steal your money. But that money

03:49.290 --> 03:53.010
was taken from the other
investors. The problem is, those

03:53.010 --> 03:55.710
investors are also expecting a
nice hefty return on their

03:55.710 --> 03:59.730
money, but 120k of it just went
out the door. So now that money

03:59.760 --> 04:02.610
now there's a shortfall, and
she's promising, or he's

04:02.610 --> 04:06.360
promising a return on the actual
amount, so now she's got to come

04:06.360 --> 04:09.630
up with even more for when those
people want to cash out. So

04:09.630 --> 04:12.330
she's going to use proof of the
first person getting paid out to

04:12.330 --> 04:14.910
convince other people to invest.
And so you bring in other

04:14.910 --> 04:17.160
people, and when these people
want to get paid out and take

04:17.160 --> 04:19.980
money from them, they pay out
these people, and you keep going

04:20.010 --> 04:23.070
up and up and up and up and up,
up the chain. And then the way

04:23.070 --> 04:27.720
that you can try to prevent a a
Ponzi scheme from folding is

04:27.720 --> 04:31.260
that you convince people not to
cash out, you tell them there's

04:31.260 --> 04:34.320
a penalty for cashing out. You
tell them that you're going to

04:34.320 --> 04:36.570
reinvest their money and make
even more money, you have to do

04:36.570 --> 04:38.790
everything in your power to
prevent them from cashing out

04:38.790 --> 04:42.030
because the Ponzi scheme will
collapse a lot quicker, hence,

04:42.330 --> 04:45.960
made off, made off was if you
pull your money out, you can

04:45.960 --> 04:48.450
never come back in. Yeah. And
why was that? Because he

04:48.450 --> 04:50.850
couldn't afford to have anyone
pull out because the whole

04:50.850 --> 04:53.130
scheme would start to unravel.
Yeah. So everyone's got to keep

04:53.130 --> 04:55.740
the money in because it's a
fraud. Right. And there's no

04:55.740 --> 04:56.490
actual business.

04:56.520 --> 04:59.100
Johny Fernandez: Yeah, and I
think we were reading according

04:59.100 --> 05:05.880
to the legal documents you know
that this was all uncovered when

05:05.880 --> 05:11.400
someone decided to number one
ring the alarm, but then also an

05:11.400 --> 05:16.320
undercover informant decided to
invest some money in and see

05:16.320 --> 05:20.290
Sean Murray: Oh, yeah, that's
that was kind of a twist in all

05:20.290 --> 05:20.350
what it was all about.

05:20.350 --> 05:20.980
this right so.

05:20.980 --> 05:22.180
Johny Fernandez: The undercover
FBI agent.

05:22.180 --> 05:24.988
Sean Murray: Undercover FBI. So
how did this all come? How did

05:24.988 --> 05:25.047
Johny Fernandez: How many
people?

05:25.047 --> 05:28.689
this all even come out? Because
this company raised more than

05:28.689 --> 05:32.331
100 million or between 7, 70 and
$120 million in under a year.

05:32.390 --> 05:35.855
How did it how did it? How did
it collapse? How do they get

05:35.914 --> 05:39.380
found out? That's the first
thing we wondered. Yeah. Right.

05:39.439 --> 05:43.198
Because I just explained to you
how it works. So someone alleged

05:43.198 --> 05:43.257
Sean Murray: Allegedly,
allegedly. These are

05:43.257 --> 05:46.899
that this company was a Ponzi
scheme in a very public way. The

05:46.958 --> 05:50.130
company that was sued MJ
Capital, then sued the person

05:50.189 --> 05:53.831
alleging they were a Ponzi. And
they won the lawsuit. They won

05:53.890 --> 05:57.355
the lawsuit and, and shut out
the person who was making the

05:57.414 --> 06:01.174
allegation. And so they came out
victorious, almost almost like,

06:01.174 --> 06:01.174
allegations, more than 2000
people invested more than 2000

06:01.232 --> 06:04.816
you know, as further proof that
this was not a Ponzi. At some

06:04.875 --> 06:07.870
point, though, the FBI was
following along and they

06:07.929 --> 06:11.219
strolled into the into the
office twice, they first came

06:11.278 --> 06:14.508
in, and like it said, like in
June this past June, this

06:14.567 --> 06:17.798
literally just recently
happened. And they pretended to

06:17.857 --> 06:21.440
be an investor. And the reason
we're telling you all this, is

06:21.499 --> 06:25.200
because guess what these type of
offers occur out there all the

06:25.258 --> 06:28.959
time, she was raising money for
syndication. Hello, if you were

06:29.018 --> 06:32.366
investing in MCA, or you know
deals or business loans, or

06:32.425 --> 06:35.832
whatever and they're going to
tell you, you're gonna get a

06:35.891 --> 06:39.357
nice return on your investment,
pay attention to what we're

06:39.416 --> 06:42.646
telling you. He was promising
between 120, 180% returns

06:42.705 --> 06:46.406
annually, which that number is
not uncommon to be thrown around

06:46.465 --> 06:50.048
in the MCA industry. So they
weren't even outrageous compared

06:50.107 --> 06:53.514
to what other people would say.
Not that you can expect to

06:53.573 --> 06:57.215
really make that amount, but it
wasn't out of control. Someone

06:57.274 --> 07:00.798
else might look at that number
and look around and see other

07:00.857 --> 07:03.970
people kind of throwing out
similar numbers. And this

07:04.029 --> 07:07.612
company was able to raise $100
million dollars in syndication

07:07.671 --> 07:10.902
money, right, look legit,
everything looks fine, right?

07:10.961 --> 07:14.427
They they even won a lawsuit
said that they were in a Ponzi

07:14.485 --> 07:18.127
scheme. But they were a Ponzi
scheme. Right. And what did they

07:18.186 --> 07:21.828
do with the money? They didn't
make any deals, they funded 2.9

07:21.887 --> 07:25.470
million of the worth the 100
million so on money, 100 million

07:25.529 --> 07:28.760
some odd dollars that they
collected FBI, went in there

07:28.819 --> 07:32.402
undercover, pretended to be a
syndicate, the FBI pretended to

07:32.461 --> 07:36.103
be an MCA syndicator. And they
said I want to put in. Yeah, so

07:36.162 --> 07:39.627
first they came in and say I
want to put this. Yeah, I want

07:39.686 --> 07:43.269
to put in 10k I want to put 10k
into deals. She was like, all

07:43.328 --> 07:46.912
right, put you into deals. So
FBI actually became a syndicate

07:46.970 --> 07:50.671
in the Ponzi scheme, watch the
money not do anything. Then they

07:50.730 --> 07:54.254
came back a second time and did
it again. Right. And so now,

07:54.313 --> 07:57.662
then they got a firsthand
glimpse as to what was actually

07:57.720 --> 08:01.362
happening and not happening. And
I assuming that they recorded

08:01.421 --> 08:05.004
all these encounters. Right. So
this MCA syndicate was really

08:05.063 --> 08:08.353
the FBI. And just in the last
week, the SEC shut down MJ

08:08.412 --> 08:12.112
Capital alleged it to be a Ponzi
scheme. And yeah, I mean, it's

08:12.171 --> 08:15.754
the the the consequences, and
the collateral damage, are only

08:15.813 --> 08:19.455
beginning to be felt as people
just start to find out because,

08:19.514 --> 08:22.158
you want to know how many people
she tricked?

08:29.800 --> 08:34.330
syndicates invested in this
fake, allegedly fake, MCA

08:34.330 --> 08:36.400
company that looks like a legit
company.

08:36.430 --> 08:38.020
Johny Fernandez: This was all in
a year period.

08:38.050 --> 08:43.150
Sean Murray: All in a year. Pay
attention people. Be be wary of

08:43.150 --> 08:45.550
your syndicates, if you're
doing, if you're up to no good,

08:45.640 --> 08:49.270
right, but also don't start a
Ponzi scheme. And if you're a

08:49.270 --> 08:51.610
syndicate pay attention to who
you're investing in.

08:51.640 --> 08:52.960
Johny Fernandez: Well, and I
think what's interesting is

08:52.990 --> 08:55.870
like, according to the legal
documents, again, these are the

08:55.870 --> 09:00.730
allegations, and the fact that
everything played out, you know,

09:00.730 --> 09:06.370
she or they decided to protect
themselves to continue to make

09:06.370 --> 09:12.640
sure they look legitimate after
you know, being sued after other

09:12.640 --> 09:16.360
people saying hey, like they're
fake. And then after an FBI

09:16.390 --> 09:20.740
undercover FBI person comes in
does the deal with them, you

09:20.740 --> 09:24.310
know, they pretty much were able
to ride that out until, you

09:24.310 --> 09:29.080
know, the last couple of days
where things blew up. So it's

09:29.080 --> 09:31.690
definitely gonna be interesting
to see how this will play out.

09:31.870 --> 09:33.970
Sean Murray: Yeah, this is this
is really up there in terms of

09:33.970 --> 09:38.620
the scale of of the alleged
fraud. Yes. I think a another

09:38.650 --> 09:41.200
another big one that happened
down there was a company called

09:41.530 --> 09:45.160
One Global Capital and if I'm
not mistaken, that was that was

09:45.280 --> 09:48.040
more or less a Ponzi scheme and
the size of that one was around

09:48.070 --> 09:49.810
300. I think around $300
million.

09:50.290 --> 09:51.760
Johny Fernandez: Do you know, do
you remember what the time

09:51.760 --> 09:53.350
length of them being in
business?

09:54.070 --> 09:55.120
Sean Murray: A lot longer than
this one.

09:55.810 --> 09:58.060
Johny Fernandez: I find it
interesting that within a year

09:58.060 --> 09:58.630
period.

09:58.930 --> 10:00.940
Sean Murray: Yeah. This is the
thing this is an insane amount

10:00.940 --> 10:02.110
of money to raise in one year.

10:02.110 --> 10:02.860
Johny Fernandez: In one year.
Yeah.

10:02.860 --> 10:05.386
Sean Murray: Yeah, for it to not
be real, the fact that they were

10:05.440 --> 10:08.580
able to raise, you know, close
to 100 million or more, they

10:08.580 --> 10:08.633
Johny Fernandez: This is a great
example. Yeah. Yeah.

10:08.633 --> 10:11.933
said up to 120 million, they're
not even entirely sure. Right,

10:11.987 --> 10:15.127
in a year's time is absolutely
incredible. The next largest

10:15.180 --> 10:18.374
scheme that I know of in that
area was One Global Capital. I

10:18.347 --> 10:18.427
Sean Murray: Look what happens
more than 2000 people invested

10:18.427 --> 10:21.568
think they had raised like, 300
some odd million dollars, I

10:21.621 --> 10:24.655
think, what was the total
amount, and this was done, that

10:24.708 --> 10:25.010
was done over like, like seven
years or something, here's

10:25.010 --> 10:26.450
into this in a year. That's
ridiculous.

10:26.450 --> 10:30.260
Johny Fernandez: And out of all
years, so that's technically.

10:30.260 --> 10:31.255
someone, here's someone who went
out and raised $100 million in a

10:31.225 --> 11:31.309
Out of all years. From 2020 to
2021. This all.

10:31.309 --> 10:34.715
year, made $2.9 million worth of
deals, and then operated like a

10:34.768 --> 10:37.962
Ponzi scheme, allegedly, you
know, from what from what we're

10:38.015 --> 10:41.422
being told, it's just insane. If
you're being offered, you know,

10:41.475 --> 10:44.456
these, these high rates of
return 120% ,180%, syndicate,

10:44.509 --> 10:47.490
MCA Business Loan, blah, blah,
blah, be very, very, very

10:47.543 --> 10:50.631
careful and cautious. A lot of
people are not not truthful

10:50.684 --> 10:53.611
about what they're doing. And
they even might have good

10:53.665 --> 10:56.432
intentions in the in the
beginning. But they're just

10:56.486 --> 10:59.839
terrible managers of money. They
don't know what they're doing.

10:59.892 --> 11:03.086
There's a proper way to do MCA,
MCA syndication, you have to

11:03.139 --> 11:06.226
follow securities' laws. If you
do it, there needs to be a

11:06.280 --> 11:09.633
securities attorney involved. If
you're gonna offer syndication

11:09.686 --> 11:12.986
if it just some person saying
yeah, I'll invest in deals. I'll

11:13.040 --> 11:16.500
give, you a note, give you a big
return blah, blah, blah. I mean.

11:35.000 --> 11:37.610
Sean Murray: Yeah, I just, it
just, it's, it's so upsetting,

11:37.640 --> 11:41.210
because, you know, not that
we're responsible for killing

11:41.210 --> 11:45.680
people, right? But. But this is,
it's a scam, a legit scam. It's

11:45.680 --> 11:49.820
a legit scheme that has played
out so many times before. And to

11:49.820 --> 11:51.950
see so many people rush rush to
get it.

11:51.950 --> 11:54.033
Johny Fernandez: And I think
this goes back to one of the

11:54.086 --> 11:57.393
earlier videos that we did was
that yes do your due diligence.

11:57.446 --> 12:00.700
You have to really do your due
diligence when you're making a

12:00.753 --> 12:04.113
deal. Doesn't matter what type
of deal, it doesn't matter where

12:04.166 --> 12:07.633
you are, on the ladder, how many
years of experience if you don't

12:07.686 --> 12:10.673
do your due diligence, as a
business owner, as a client,

12:10.726 --> 12:13.500
etc. This is where you end up
losing a ton of money.

12:14.220 --> 12:16.080
Sean Murray: Yeah, do your due
diligence and doing due

12:16.080 --> 12:18.360
diligence isn't looking at their
Instagram profile.

12:19.710 --> 12:22.696
Johny Fernandez: We did that.
And it was legitimate, like she

12:22.764 --> 12:26.430
was working with like local
charities, local community

12:26.498 --> 12:29.010
organizations, that you're like,
wow.

12:29.010 --> 12:31.608
Sean Murray: They had a website,
a YouTube channel. They had, you

12:31.658 --> 12:34.506
know, they were involved with
charities, they were public

12:34.556 --> 12:37.354
facing, they weren't hiding in
some shady back office or

12:37.404 --> 12:40.302
whatever, that made it look
legit. By the way, that is not

12:40.352 --> 12:43.400
due diligence. That's something
we do to just talk about on a

12:43.450 --> 12:46.598
show. You need to do real things
like look at their financials,

12:46.648 --> 12:49.746
go through their systems, find
out who's auditing the platform

12:49.796 --> 12:52.994
that the money's being invested
on. That's due diligence, do not

12:53.044 --> 12:55.942
look at your social media and
say, this looks legit to me,

12:55.992 --> 12:58.791
because that's how they
intentionally are trying to fool

12:58.840 --> 13:00.390
you. Yeah. I'm pretty, I'm mad.

13:00.390 --> 13:02.978
Johny Fernandez: No, I, I think,
I think the one thing that

13:03.040 --> 13:06.615
baffles me is that, like you
said, this is we've seen this

13:06.676 --> 13:10.560
time and time and time again,
and some people just don't learn.

13:10.560 --> 13:13.403
Sean Murray: They don't learn. I
hope you learn now. For any of

13:13.460 --> 13:16.986
you out there who are, you know,
thinking about syndicating or

13:17.043 --> 13:20.171
investing in deals, you got to
be extremely, extremely,

13:20.228 --> 13:24.210
extremely careful. Because, you
know, this had happened so many times.

13:24.210 --> 13:26.280
Johny Fernandez: And it will
continue to happen.

13:26.280 --> 13:27.540
Sean Murray: It will continue to
happen.

13:27.540 --> 13:29.400
Johny Fernandez: Just however
long we're on this earth.

13:31.200 --> 13:33.338
Sean Murray: You know, for like
reporters and stuff it's great

13:33.381 --> 13:36.480
because it's news, but I feel
bad for all the people who were affected.

13:36.480 --> 13:37.680
Johny Fernandez: Yeah, absolutely.

13:37.680 --> 13:38.460
Sean Murray: It's a shame