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In Malaga on 16 March 1878, Juan founded the Congregation of the Sisters of Charity of the Blessed Virgin Mary of Mercy to work for the spiritual and physical improvement of the poor. The Congregation soon spread throughout Spain. However, a scandal developed when some of the Sisters accused Juan of impropriety, and on 7 July 1888 he was ordered away from the Congregation. A lengthy investigation followed during which Juan kept his silence and obeyed all orders of his superiors. On 15 July 1894 he was cleared of all the false allegations, and though he voluntarily stayed away from the Congregation, he again was recognized as its founder.