Ponzi scheme suspect paid US$720K for prayers amid SEC probe
GREENBELT, Md. — An investment adviser charged with orchestrating a multimillion-dollar Ponzi scheme spent nearly three-quarters of a million dollars on prayers by Hindu priests in India to ward off a federal investigation and save her failing business, according to testimony at her trial this week.
Using investors’ money, Dawn Bennett paid a man in Washington state approximately US$720,000 between 2015 and 2017 to arrange for the priests to perform religious ceremonies meant to ease her troubles, a Justice Department prosecutor and the man Bennett paid said. For one of these “yagya” rituals, Bennett spent US$7,250 for five priests to pray for her across 29 consecutive days.
Six-figure payments for prayers didn’t spare Bennett from a 17-count indictment on fraud charges. Neither did the “hoodoo” spells that investigators suspected her of casting to stymie federal investigators, a claim fuelled by a peculiar discovery during an FBI search of her home.
Bennett, 56, raised more than US$20 million from at least 46 investors in her luxury sportswear company, often preying on elderly clients who knew her from a radio show she hosted in the Washington, D.C., area, authorities have said. They said she used investors’ money for her personal benefit, including jewelry purchases, cosmetic medical procedures and a US$500,000 annual lease for a luxury suite at the Dallas Cowboys’ home stadium.
Bennett told U.S. District Judge Paula Xinis on Thursday that she doesn’t intend to testify at her trial. One of her trial lawyers, Dennis Boyle, said Bennett invested US$13 million of her own money into the fledgling apparel business, selling assets and mortgaging homes to generate cash.
“She clearly believes that this is a legitimate company,” he said. “It catered to only the most discerning people.”
But her apparel business, DJBennett, never made a profit and had at least
US$15.6 million in liabilities and only
US$550,000 in revenue by December
2016, according to a complaint filed by the U.S. Securities and Exchange Commission.
The indictment says she also used money from some investors to pay others, but many lost everything they paid Bennett.
The FBI’s investigation of Bennett began in December 2015 after the SEC formally accused her of defrauding investors by inflating the amount of assets she managed and exaggerating the returns on her customers’ investments. The SEC cited statements that Bennett made on her paid weekly radio show, Financial Myth Busting With Dawn Bennett.
Bennett’s financial advisory business was losing clients and incurring millions of dollars in losses before she turned to the fraudulent sale of promissory notes to “tap a new income stream,” the SEC said in its complaint.
“As her financial condition rapidly deteriorated, Bennett began accumulating a variety of personal financial obligations, but nonetheless continued to spend considerable sums to fund her extravagant lifestyle,” the complaint said.
When FBI agents searched Bennett’s home in Chevy Chase, Md., last year, they found instructions for placing people under a “Beef Tongue Shut Up Hoodoo Spell” and biographical information for at least three government lawyers working on the SEC investigation of Bennett, according to an agent’s affidavit.
FBI agents also found the initials of SEC lawyers written on the lids of Mason jars stored in Bennett’s freezers, suggesting she had cast spells in hopes of “paranormally silencing” the SEC lawyers, the agent wrote.
Bennett’s lawyers argued that any such “hoodoo” practices are irrelevant and their mention by prosecutors only serves to smear her. Boyle also objected to testimony about the “substance” of the prayers she commissioned in India.