The US Securities and Exchange Commission (SEC) has filed a lawsuit against Joel Castellanos.

The SEC’s complaint, submitted at the Florida Southern District Court on February 23, 2026, alleges that, from at least June 2020 until August 2021, Castellanos personally, and through his team of sales agents, solicited and raised at least $25.2 million from at least 1,222 investors nationwide on behalf of MJ Capital Funding, LLC and its affiliate MJ Taxes and More, Inc.

The MJ Companies and Johanna M. Garcia, who was their owner, chief executive officer and president, operated the MJ Companies as a Ponzi scheme.

From at least June 2020 until August 2021, they raised over $196 million from more than 15,500 investors nationwide and internationally through an unregistered fraudulent securities offering.

Garcia and the MJ Companies tricked investors into thinking their investment would be used to fund small business loans called Merchant Cash Advances (“MCAs”) and that their returns would derive from the income MJ Capital earned through a business’s repayment of their MCA loan over a specified period of time.

In reality, investors’ outsize annualized “returns” of 120% – 180% were funded with money obtained from new investors.

The Ponzi scheme collapsed once the Commission filed its emergency action to stop this ongoing fraud on August 9, 2021, against Garcia and the MJ Companies. On August 11, 2021, the Court granted the Commission’s motions for an asset freeze and injunctive relief against the MJ Defendants and the appointment of a receiver over the MJ Companies.

Castellanos played a significant role in soliciting and raising money from investors for the MJ Companies. He told investors that their money would be used to fund the MJ Companies’ purported MCA business and, in exchange, they would receive returns of 10% or more per month along with the return of their principal investment upon maturity.

He also served as an MJ Capital “board member,” was responsible for “team & employee relations/charity events & office events,” and ran a team of about 42 sales agents who solicited money from investors nationwide on behalf of the MJ Companies.

But only a small fraction of investor funds was used to make MCAs. Instead, most of the investor funds were used to pay fictitious returns to existing investors, undisclosed commissions to sales agents who promoted investments in the MJ Companies, and personal expenses for insiders of the MJ Companies.

As such, investors’ ability to receive the promised returns and repayment of principal was dependent on a rising stream of funds from new investors, and by convincing existing investors to renew their existing investments, thus deferring the MJ Companies’ need to repay investors their principal investment.

Furthermore, at all relevant times, Castellanos held no securities licenses, was not registered with the Commission, and was not associated with a registered broker-dealer. The MJ Companies’ securities were not registered with the Commission, nor did they qualify for an exemption from registration. Castellanos thus was not permitted to sell the MJ Companies’ securities.

The SEC accuses Castellanos of violations of Sections 5(a), 5(c) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 77e(a) and 77e(c); and Section 15(a)(1) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78o(a)(1).

Castellanos is a resident of Tamarac, Florida. Castellanos was a lead sales agent and “board member” of MJ Capital.