Chevy Chase Woman Convicted on Securities Charges

A Chevy Chase woman was found guilty on 17 federal charges related to a $20 million Ponzi scheme, the U.S. Attorney’s Office in Baltimore said Wednesday.

A jury needed less than five hours to reach its verdict for Dawn J. Bennett, 56 on all 17 federal charges. She faced offenses related to conspiracy, securities fraud, wire fraud, bank fraud, and making false statements on a loan application.

She remains detained while she awaits her sentence, according to a U.S. Attorney’s Office statement. U.S. District Judge Paula Xinis has not yet scheduled a date for sentencing.

In the statement, U.S. Attorney Robert K. Hur said Bennett knowingly defrauded elderly retirees of their life’s savings.

According to the information presented at her nine-day trial, Bennett is the owner and operator of DJB Holdings LLC, which did business as DJBennett.com, a now-defunct Internet retail website for luxury sportswear.

According to the evidence presented at trial, between December 2014 and April 2017, Bennett solicited individuals to invest money in her Internet clothing business, offering an annual interest rate of 15 percent via convertible or promissory notes.

To entice individuals to invest, Bennett made false and misleading statements, including: the risks of investing in DJB Holdings; how investors’ funds would be used; and that the loans were liquid and guaranteed by DJB Holdings’ inventory and assets, and by Bennett herself, the statement said.

Witnesses testified that Bennett concealed the true financial condition of her companies from investors, the statement said. Bennett persuaded several investors to withdraw a significant portion of their retirement accounts to invest in, and loan money to, her companies.

The evidence showed that Bennett misappropriated investor funds, using them to fund a lavish lifestyle, pay her personal legal expenses, and repay previous investors with funds she received from new investors, the statement said. This is consistent with a Ponzi scheme–a fraudulent investment scheme where the operator of the scheme solicits investors by promising high rates of return with little risk.

According to testimony at trial, over the course of the scheme, Bennett obtained more than $20 million from 46 investors, many of them elderly clients who knew of Bennett from a radio show she hosted, the statement said. Some of those funds were used to pay earlier investors and the rest was used for her personal benefit, including: a luxury suite at a football stadium; to pay a website operator to arrange for priests in India to perform religious ceremonies to ward off federal investigators; to purchase astrological gems; and for cosmetic medical procedures.

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