“Dawn Bennett knowingly defrauded retirees of their life’s savings — most of which she used for her own personal benefit,” Robert K. Hur, U.S. attorney for the District of Maryland, said in a statement. “She’s been held accountable for her lies and theft and will now spend years in federal prison.”
Bennett’s attorney could not immediately be reached for comment after her sentencing.
Bennett, 56, had told investors that she was using the money to build her Internet retail business to sell luxury sportswear, according to testimony from her trial. But Bennett lied about the success of DJBennett.com, prosecutors said, and instead used the cash to fund a posh lifestyle that included two penthouses in the wealthy suburb of Chevy Chase, a box suite at the Dallas Cowboys’ stadium worth about $500,000, and payment for priests in India to “perform religious ceremonies to ward off federal investigators.”
The case captured national attention after authorities revealed she had conjured curses involving a freezer full of beef tongues in hopes of warding off the investigation against her. The freezer contained jars of tongues labeled with the initials of Securities and Exchange Commission lawyers as part of a “shut-up hoodoo” spell, according to court documents. At trial, prosecutors said she used the money from people she scammed to pay priests in India to perform ceremonies that she thought could thwart the investigation into her dealings.
In October, a
U.S. District Court jury in Greenbelt found Bennett guilty on 17 counts, including conspiracy, lying on a loan application and several charges of bank, wire and securities fraud.
During her two-week trial, Bennett’s attorneys argued that she genuinely believed her sportswear company would succeed. Although she was accused of inflating the value of the business to investors, her attorney said she was growing the company by building a customer base and market share and not yet through direct profits. Bennett invested millions of dollars into her own venture, a move she wouldn’t have made if she were running a fraud, her attorney argued.
Bennett, a licensed financial adviser and host of a weekly syndicated radio talk show in the Washington area, told clients from her brokerage business they would get a 15 percent return on their loans if they invested in her new sportswear company, according to trial testimony. She told them they could have their money back at any time.
Ponzi schemes use money obtained from later investors to provide quick returns to initial investors, creating a false sense of success that in turn lures more investors.
Prosecutors accused her of playing down the risks of investing and falsely promising the loans were guaranteed by her company’s inventory and assets. Her scheme, pitched between December 2014 and April 2017, victimized 46 investors, many of whom were older and drained their life savings or retirement nest eggs to invest.
Several of her former clients who testified against her in court said that they never got their money back and that she had sent them false financial statements inflating the worth of her business to assure them their investments were sound.
In May 2015, Bennett’s company obtained a $750,000 line of credit, telling the bank that her portfolio had a net worth of more than $4 million, federal prosecutors said. The true value, according to prosecutors, was $35.
In addition to 20 years in prison, the judge ordered Bennett to pay $14.5 million in restitution and forfeit $14,306,842.