A Maryland woman was convicted of several counts of fraud connected to a Ponzi scheme in which the government says she scammed $20 million from victims by telling them they were investing in her luxury sportswear business but instead used the cash to support her luxurious lifestyle.
A federal jury deliberated for less than five hours before convicting Dawn Bennett on Wednesday after a two-week trial in U.S. District Court in Maryland.
Bennett, 56, of Chevy Chase, Md., was found guilty of 17 counts including conspiracy, lying on a loan application and several charges of bank, wire, and securities fraud. Investigators alleged she turned to voodoo — filling her freezer with jars labeled with the initials of U.S. Securities and Exchange Commission lawyers and spells involving beef tongue — in hopes of thwarting the probe of her financial dealings. Prosecutors also said she used victims’ money to pay to have priests in India perform religious ceremonies that would ward off investigators.
Bennett was a licensed financial adviser and hosted a weekly syndicated radio talk show in the Washington area. When she launched DJBennett.com, she began approaching clients from her brokerage business to invest in the sportswear company. She promised them a 15 percent return on what victims understood to be a loan, prosecutors said, and said that if they needed the money returned at any point, she would repay them immediately.
She pitched her business between December 2014 and April 2017, according to prosecutors and testimony, misstating the risks of investing and that the loans were guaranteed by her company’s inventory and assets, and by Bennett personally. Her scheme lured 46 investors, many older ones who knew of her through her radio show, “Financial Myth Busting with Dawn Bennett.”
“Dawn Bennett’s greed knew no bounds as she knowingly defrauded elderly retirees of their life’s savings,” U.S. Attorney Robert K. Hur said in a statement after the verdict. “This conviction — and the years in federal prison that she is facing — holds her accountable for her actions.”
Bennett’s case captured national media attention when she was arrested last year after FBI agents searching her home found instructions for a “Beef Tongue Shut Up Hoodoo Spell” along with thousands of dollars in luxury goods. The spell, authorities say, was an attempt to halt the investigation, including one being conducted by the SEC.
“Consistent with the instructions on how to cast a ‘hoodoo spell,’ agents discovered in Bennett’s residence two freezers containing dozens of sealed Mason jars with identifying information for the same SEC attorneys, suggesting Bennett had many times cast a ‘hoodoo spell’ in hopes of paranormally silencing the SEC attorneys investigating Bennett,” the federal affidavit said.
Bennett’s attorneys had argued that she genuinely believed her sportswear company would succeed. She may have exaggerated some of that success, her attorney Dennis Edward Boyle said in court, but “there is a difference between a lie and a crime.” They also said that the value of her business was through the market share and customer base she was building and not direct profits.
According to federal prosecutors, testimony showed that Bennett falsely told a bank as she applied for a line of credit for business operations that she had a brokerage account with a net portfolio value of more than $4 million when the value was $35.
The loan went into default and prosecutors said some of it had been used to cover her personal expenses.When lenders told Bennett that her loan was in default, she said she did not know because she had been in China for eight months, but her credit card showed several transactions in Chevy Chase and the Washington area during the time she claimed to be away, prosecutors said.
In court, prosecutors said Bennett spent victims’ money on expensive beauty treatments, her two penthouses, a $500,000 box suite at AT&T Stadium, the home of the NFL’s Dallas Cowboys, and to have priests in India to perform religious ceremonies to ward off federal investigators.
Hur’s office said Bennett faces a maximum of 20 years in prison for wire fraud conspiracy and for each of nine counts of wire fraud; a maximum of five years in prison for securities fraud conspiracy; a maximum of 20 years in prison for each of four counts of securities fraud; and a maximum of 30 years in prison each for bank fraud and for false statements on a loan application.
Bradley Mascho, 52, of Frederick, Md., who worked as chief financial officer for Bennett, pleaded guilty to fraud in a related case this year and also is awaiting sentencing, Hur’s office said.L