Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—S.D. Fla.: Ponzi scheme participant settles charges, (Feb 27, 2026)

By R. Jason Howard, J.D.

The defendant will pay a $150,000 civil penalty and is enjoined from committing future violations of the federal securities laws.

The SEC has announced settled charges against a defendant for his part in a Ponzi scheme that raised over $196 million from more than 15,500 investors nationwide and internationally through an unregistered fraudulent securities offering orchestrated by the principal officer of MJ Capital Funding LLC and an affiliated company, MJ Taxes and More, Inc., which are both under court appointed receivership (SEC v. Castellanos, No. 0:26-cv-60495-XXXX (S.D. Fla. Feb 23, 2026)).

Scheme. According to the SEC press release, the complaint alleged that the defendant, “personally and through his sales team of about 42 sales agents, solicited and raised at least $25.2 million in MJ Capital’s unregistered securities from at least 1,222 investors.” The complaint also alleged that the defendant “earned commissions on his sales, even though he was not registered as a broker or dealer or associated with a registered broker-dealer.”

Charges. For his part, the defendant was charged by the SEC with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act and Section 15(a)(1) of the Securities Exchange Act of 1934.

Penalties. Without admitting or denying the SEC’s allegations, the defendant consented to the entry of a final judgment, subject to court approval, that will enjoin him from violating the charged provisions of the federal securities laws and order him to pay disgorgement of over $46,000 with prejudgment interest of over $13,000. Those amounts will be deemed satisfied by the amounts collected by the court appointed receiver stemming from the SEC’ charges against MJ Capital Funding and MJ Taxes, but the defendant must pay a civil penalty of $150,000.

MJ Capital. The SEC previously charged MJ Capital, MJ Taxes, and their principal on August 9, 2021, for allegedly perpetrating an unregistered fraudulent securities offering and Ponzi scheme. MJ Capital and MJ Taxes are currently under a court-appointed receivership. The court entered a final consent judgment against the principal officer on May 2, 2025, which permanently enjoined her from violating Section 5 of the Securities Act of 1933, imposed an officer and director bar, and ordered her liable for disgorgement with prejudgment interest, which were deemed satisfied by the forfeiture order entered against her in a parallel criminal case.

The case is No. 0:26-cv-60495-XXXX.

Attorneys: Christine Nestor for the SEC.

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