Rewind to 2019’s most unusual financial crime case – the Ponzi schemer who paid US$720,000 for online spiritual rituals and filled freezers with beef tongues to cast voodoo spells on SEC lawyers to stop an investigation

By Christine Duhaime | May 30th, 2020

This case wins first prize as the most unusual financial crime case of 2019. It’s about Dawn J. Bennett, a former stock broker from Maryland, who first worked with Western International Securities. In addition to selling securities, Bennett was a financial expert on a radio show where she dispensed investment advice and believed that she could use witchcraft to control lawyers at the SEC and cause them to end a financial crime investigation.

Things didn’t go so well for Bennett at any of the companies she worked at or started, including at Western International Securities.

In 2015, she was allowed to resign from Western International Securities in the midst of concerns that arose from the organization as to her handling of some of the firm’s accounts.

Radio show expert

Having been essentially asked to depart, she then set up her own company called DJB Holdings, LLC, and commenced to sell securities to the investing public using, inter alia, her appearances as an expert on the radio show. It was called Financial Myth Busting.

On the radio show, social media and in material provided to prospective investors, Bennett made numerous misrepresentations in connection with her company, particularly about the amount of assets under management, exaggerating the size of her company and number of customers, to lure in money. The misrepresentations were repeated. It seems that every time she hit the radio waves, she lied or exaggerated in one way or another to drive business or to give the illusion that her company could, would and did safeguard investments and could, would and did provide remarkable returns to investors.

Initial SEC investigation

Her misrepresentations on the radio show and on social media attracted the attention of the Securities and Exchange Commission (“SEC“), who investigated whether they were true and substantiated or were untrue and misrepresentations made to lure investors.

When the SEC came calling, Bennett decided that they had no jurisdiction over her and refused to participate in an SEC process. She did not appear for a hearing. As a result, she was barred from the industry and fined.

At that point, the SEC was only alleging that she exaggerated and misrepresented information to attract investments, but Bennett then proceeded to mount a public campaign to defend herself, alleging that she had not engaged in any wrongdoing and was being targeted on groundless allegations.

Bennett protested too much

For whatever reason, perhaps because of the “[thou] doth protest too much” syndrome, the government decided to continue with a deeper look into Bennett.

What they discovered was not pretty.

Ponzi scheme discovered

It turns out Bennett was indeed protesting too much to try to divert the SEC away from her because she was operating a Ponzi scheme, taking money from new investors to pay out old ones, all the while living a lavish lifestyle. She was still on the radio show, pumping her experience and expertise to drive money to the firm from people who trusted her and believed that their money would be safe.

Fabricated financial records

Two complaints were then filed – one from the SEC and the other from the DOJ, both in Maryland, alleging, in essence that Bennett sold US$20 million in fake securities to investors, some of whom were elderly, and that she spent investors’ money on jewellery, cosmetic surgery procedures for Botox, luxury items and to start a new business that she intended to use as an exit strategy. She appears to have never used investor money to buy anything for investors; rather she just straight spent it and gave investors fake statements so they had the illusion that they held investment products.

The SEC complaint stated that Bennett made false statements, lied and fabricated documents to SEC investigators as part of their investigation, and created falsified documents attached to a financial institution to obtain more money; in essence committing bank fraud to keep the Ponzi scheme going because it was out of money.

It got wonky

And here is where is gets wonky.

Before the filed complaints, Bennett was aware of the 2nd SEC investigation. Among other things, they were asking for documents and taking statements from her staff.

Bennett paid US$720,000 for online spiritual rituals to deal with the SEC investigation

During the investigation, Bennett sought help from unusual sources.

She located a website that sells spiritual yagya ceremonies, which is a ritual that takes place over a sacred fire (allegedly in India except that it was in Washington State) that sends out a curse or a blessing, and proceeded to spend US$720,000 on those yagyas. She emailed the yagya provider to say that she needed help with her “enemies”, and hired five of their people to do yagyas for 29 days straight.

Bennett cut up beef tongues and froze them with voodoo spells against SEC lawyers

When yagyas had no effect, she then consulted witch doctors, possibly also online, to place a voodoo spell over three SEC lawyers involved in her case. To activate the voodoo spells, Bennett bought beef tongues, split them in two and stated “I cross and cover you, come under my command. I command you to hold your tongue” over the tongues and then stored them in mason jars and put them in freezers. She believed that she had magical power to cast spells using voodoo that would cause three SEC lawyers to stop the investigations. She cast so many voodoo spells over the SEC lawyers, that the tongues filled two freezers at her home.

She ran out of freezer space and when the FBI showed up, she was out of magic and out of time.

Fake a breakdown

Bennett also paid the legal fees of her employees and prepped them to meet with the SEC and went so far as to prepare scripts for them. One employee was coached to claim that they suffered some sort of a temporary mental illness.

Bennett was charged with wire fraud, securities fraud and making false statements to obtain credit from a bank and customers.

Personal debt disappeared

At her trial, her lawyers alleged that she believed that the business was legitimate, and worked hard to make it successful, and alleged that she put her own money into the business to keep it afloat.

But according to the trial, that wasn’t true – she had no money of her own to begin with. She simply put back in customer money she had previously taken from investors. The evidence showed that before starting her last company, she owed significant debt and was being sued for collection and that she used money from the new company (from investors) to pay off that personal debt and keep debt collectors at bay.

She was convicted and sentenced to 20 years in jail. She is currently incarcerated at a minimum security facility in West Virginia until November 15, 2034.

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