UNREGISTERED SALESMAN RAKES IN $25 MILLION FOR PONZI SCHEME!

SEC v. Joel Castellanos — U.S. Securities and Exchange Commission Litigation Release No. 26490, dated February 24, 2026.

The SEC charged Joel Castellanos for his role in a $196 million Ponzi scheme orchestrated by MJ Capital Funding. Castellanos, who was not a registered broker, personally and through a team of 42 agents, raised at least $25.2 million from over 1,200 investors. He has settled the charges, agreeing to penalties and disgorgement.

In Plain English

Imagine someone promised you a really high return on your money, like 10% every month, by investing in small business loans. But instead of actually making those loans, they used money from new investors to pay off earlier investors. This is called a Ponzi scheme. Joel Castellanos helped sell these fake investments, even though he wasn't licensed to do so. He has now settled with the SEC, agreeing to pay back some of the money and a penalty.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. The Promise From at least June 2020 to August 2021, Joel Castellanos and his team of about 42 sales agents solicited investors for MJ Capital Funding and its affiliate MJ Taxes and More. They promised investors monthly returns of 10% or more, plus the return of their principal investment.
2. The Fake Business Castellanos told investors their money would fund the MJ Companies' purported business of providing merchant cash advances (MCAs) to small businesses. He also served as an MJ Capital 'board member' and was responsible for 'team & employee relations/charity events & office events'.
3. The Ponzi Structure In reality, the MJ Companies, operated by Johanna M. Garcia, were running a Ponzi scheme. Instead of funding MCAs, most investor funds were used to pay fictitious returns to existing investors and undisclosed commissions to sales agents like Castellanos.
4. Unregistered Sales Crucially, Castellanos was not registered with the SEC and had no securities licenses. He was not associated with a registered broker-dealer, meaning he was legally prohibited from selling the MJ Companies' unregistered securities.
5. Massive Fundraising Through this fraudulent operation, Castellanos personally and through his sales team raised at least $25.2 million from at least 1,222 investors nationwide.
6. Scheme Collapse The Ponzi scheme collapsed when the SEC filed its emergency action against MJ Capital, MJ Taxes, and Garcia on August 9, 2021, leading to an asset freeze and the appointment of a receiver.

The Enforcement Action

On February 23, 2026, the SEC filed a settled action against Joel Castellanos for his role in an alleged $196 million Ponzi scheme orchestrated by MJ Capital Funding, LLC, MJ Taxes and More, Inc., and their principal officer, Johanna M. Garcia. Castellanos, through himself and a sales team of 42 agents, allegedly raised at least $25.2 million in unregistered securities from 1,222 investors. The SEC charged Castellanos with violating registration provisions of the Securities Act and the Securities Exchange Act. Without admitting or denying the allegations, Castellanos consented to a final judgment that would enjoin him from violating the charged provisions, order disgorgement of $46,861.94 with prejudgment interest of $13,084.42 (deemed satisfied by receiver collections), and impose a $150,000 civil penalty. The SEC had previously charged MJ Capital, MJ Taxes, and Garcia on August 9, 2021. Garcia consented to a final judgment on May 2, 2025, which included an injunction, officer and director bar, and disgorgement deemed satisfied by forfeiture in a parallel criminal case.

Named in this action: Joel Castellanos.

Original SEC litigation release ↗ · Browse all cases