Former Advisor Dawn Bennett Sentenced to 20 Years
Former investment adviser Dawn Bennett was sentenced to 20 years in prison on Wednesday for defrauding 46 investors as part of a $20 million Ponzi scheme, according to the U.S. Attorney’s office for the District of Maryland.The advisor, who hawked her services through a paid radio show called Financial Myth Busting, was convicted in October of fraud and conspiracy. U.S. District Judge Paula Xinis on Wednesday also ordered her to pay $14.5 million in restitution to the victims.
Bennett, 56, was ranked a Top 100 Women Financial Advisor in 2009, and worked for 28 years as a broker and registered investment adviser.
She spent much of the money raised from customers between December 2014 and April 2017 on personal items, including a $500,000 suite to watch Dallas Cowboys games, according to prosecutors. She spent $800,000 to hire priests in India to perform rituals aimed at warding off investigators from the Securities and Exchange Commission and the Federal Bureau of Investigation, and purchased astrological gems and “Hoodoo” spells in her quest to defeat them, they said.
“Dawn Bennett knowingly defrauded retirees of their life’s savings, most of which she used for her own personal benefit,” U.S. Attorney Robert K. Hur said in a statement. “She’s been held accountable for her lies and theft.”
Bennett, who the Securities and Exchange Commission barred in 2016, began her brokerage career at Wheat, First Securities Inc. in 1987. She moved to Legg Mason Wood Walker Inc. in 1996 and also worked briefly at Smith Barney before becoming an independent broker with Royal Alliance Associates in 2006.
She was registered as an independent broker with Western International Securities during the time of the alleged Ponzi scheme, but was “permitted to resign” after the firm discovered that she was borrowing from customers for an outside business. Donald Bizub, chief executive of Western International, did not return a call for comment.
Bennett, who did not testify at her trial, vowed in a statement she read at the sentencing hearing to devote herself to repaying “every penny” she took from investors, according to The Associated Press.
“I am so profoundly humiliated that it will be difficult to ever shake it off,” she said.
William E. Zapf, who led Bennett’s 14-lawyer defense team, did not immediately return a request for comment.
Bennett’s BrokerCheck report includes 44 disclosures of customer, criminal and civil complaints and convictions. Thirteen customer complaints are pending.
The SEC, which barred her for inflating the assets she managed and the returns she produced, also fined her $4.1 million in July 2016.
Bradley Mascho, a former partner at Bennett Group Financial Services, pleaded guilty in October to conspiracy to commit securities fraud and making a false statement. He faces 10 years in prison and will pay $5.7 million in restitution, according to Wednesday’s announcement.