Former Financial Advisor Charged With Defrauding Clients of $20 Million

A former financial advisor, Dawn Bennett, was sentenced to 20 years in prison on Wednesday for defrauding 46 investors as part of a $20 million Ponzi scheme. Bennett, who was ranked a Top 100 Women Financial Advisor in 2009, pleaded guilty to fraud and conspiracy charges in October. She was ordered to pay $14.5 million in restitution to her victims.

Bennett, 56, 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, hiring priests in India to perform rituals aimed at warding off investigators, and purchasing astrological gems and "Hoodoo" spells in her quest to defeat them.

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.

"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 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. She said she was "so profoundly humiliated that it will be difficult to ever shake it off."

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.

The case of Dawn Bennett serves as a stark reminder of the importance of thorough due diligence when selecting a financial advisor. Investors should be cautious of advisors who make grandiose claims or promise unrealistic returns. Additionally, regulatory bodies such as the SEC and FINRA must remain vigilant in monitoring the activities of financial advisors to prevent similar frauds in the future.



In conclusion, the sentencing of Dawn Bennett sends a strong message to financial advisors who engage in fraudulent activities. Investors must remain vigilant and perform thorough due diligence when selecting financial advisors, while regulatory bodies must continue to monitor and enforce regulations to protect investors from fraud.