accused Ponzi schemer used ‘hoodoo spell’ to thwart probe

[Fantômas]

www.washingtonpost.com/news/morning-mix/wp/2017/08/31/radio-host-and-accused-ponzi-schemer-used-hoodoo-spell-to-thwart-probe-feds-say/?noredirect=on&utm_term=.a9ee92e72898

[logan9a]

Washington Post wants money to read it (I use adblocker) - bad newspaper.

[Scott]

Usually you can circumvent paywalls like that by pasting the URL into google and then linking from there.

[Fantômas]

Article also contained photos and links

Federal agents likely were not bracing for many surprises when they pushed through the doors of a Chevy Chase, Md., condo building on Aug. 2. This was — on paper at least — a fairly routine alleged Ponzi fraud.

But when investigators began picking through the penthouse apartment owned by financial adviser and former radio host Dawn J. Bennett, agents from the FBI bumped into one oddity after the next, according to court documents.

Sure, there were the accoutrements of excess — the closet was clogged with hundreds of pairs of shoes. But agents also discovered biographical information on attorneys with the Securities and Exchange Commission. They additionally turned up handwritten notes detailing something called a “Beef Tongue Shut Up Hoodoo Spell,” a procedure calling for slitting open an animal tongue. Another note was scratched with an incantation: “I cross and cover you[,] come under my command[.] I command you to hold your tongue.”

Then, the two freezers: Inside, the shelves were crowded with dozens of sealed jars, many inked on the lids with the initials of SEC staff, the documents say. The bizarre findings, according to an affidavit filed in federal court this week, suggested Bennett had “many times cast a ‘hoodoo spell’ in hopes of paranormally silencing the SEC attorneys” handling her case.

The suspected spell didn’t work. On Monday, the U.S. attorney’s office in Baltimore filed a federal criminal complaint in U.S. District Court against Bennett for wire fraud, bank fraud and false statements in relation to loan and credit applications. The adviser was arrested on Aug. 25 in Santa Fe, N.M., according to a news release from the Justice Department.

The same day, the SEC filed a civil action against Bennett and her D.C.-based retail luxury sports apparel business, DJBennett.

The SEC accuses Bennett of fraudulently raising $20 million between December 2014 and July 2017. The complaint said the adviser — whose weekly radio show “Financial Myth Busting with Dawn Bennett” was once syndicated in 20 national markets — “targeted elderly and financially unsophisticated investors by materially misrepresenting the company’s profitability and by claiming the company had the resources to pay annual rates of return as high as 15 percent.”

Instead of flowing into the business, this money allegedly paid off earlier investors, as in a traditional Ponzi scheme, while also going to finance an expensive lifestyle complete with “high-end clothing, mystics, and $500,000 annual lease for a luxury suite at AT&T Stadium in Dallas,” according to the SEC.

The new charges come a year after the financial watchdog agency banned Bennett from the securities industry and fined her firm, Bennett Group Financial Services, more than $4 million. She denied all wrongdoing at the time.

When contacted for comment, Bennett referred The Washington Post to her attorneys. Neither responded to an email seeking comment.

Throughout Bennett’s career, the now-55-year-old presented herself as a skilled and successful adviser. According to her website, she once could draw guests such as Sen. Rand Paul, Ben Carson and Steve Forbes for her program.

Her interests were not only tied to money-management. In 2011, Vogue TV featured Bennett as she introduced a line of high-end denim printed with dragon designs. The narration said the adviser had “used her success in finance to follow her true passion and launch a career in fashion.”

Whatever may later have been inflated or all front, the government acknowledges Bennett’s financial firm did considerable business at one point. At her firm’s height, Bennett managed “as much as $350 million in customer assets,” netting the adviser “millions of dollars annually in commissions.”

Between 2012 and 2015, a large number of those customers took their business elsewhere, the government alleged. By 2014, Bennett was only managing $42 million in assets, according to the SEC, leaving her total commissions at less than $1.6 million. At the end of the next year, the adviser was only pocketing $100,000 in commissions.

At the same time, Bennett’s luxury sporting goods business, which she opened in 2010, was an additional drain on her personal wealth; the SEC court records show that the business was only pulling in revenue of $400,000 by December 2016 yet faced liabilities of $15.6 million.

Despite the financial trouble, Bennett continued to “spend lavishly and beyond her means,” the SEC stated. “To create a new source of income, Bennett engaged in a fraudulent scheme that raised more than $20 million” through the fraudulent sale of “DJBennett convertible and promissory notes.”

To net these investors, Bennett allegedly “materially misrepresented the financial condition and operating performance of DJBennett” between December 2014 and July 2017. For example, the government said the 2016 version of company’s business plan tweaked the previous year’s performance by overstating sales by $3.8 million, profit by $2.5 million and net income by $6.1 million while understating expenses by $3.6 million.

At least $10.3 million of the $20 million Bennett raised for the business went elsewhere, according to the government. The SEC’s filing claimed at least $3.3 million went to “interest and redemption payments to earlier investors in the nature of a Ponzi scheme” while $2.1 million paid for legal fees and $1.45 million paid off the back rent on a luxury box at the Dallas Cowboys’ AT&T Stadium.

Bennett is accused of spending more than $500,000 of that money on other personal items, and an account of her expenses by the government reveals an interest in the spiritual realm.

According to an FBI agent’s affidavit filed this week, in March 2016, Bennett spent $29,715 at a Fairfield, Iowa, business called Astrological Gem that provides stones for Vedic astrology. The financial adviser also spent $11,400 on a website called Puja.net that “provides clients with ‘yagyas’, which can be described as Hindu ritual blessings or curses,” the affidavit said.

The “hoodoo spell” federal agents claim they found fits into this interest in the otherworldly.

Regarding the spell, a 2011 post on Dr. E’s Conjure Blog said: “People can’t seem to shut their mouths and mind their own business. That’s where the good old beef tongue shut up spell comes in handy.” The post goes on to explain “a beef tongue is used to represent your enemy’s wagging tongue and the spell uses very clear symbolism to tie that tongue up and stop them from speak out against you.”

The recipe involves writing down the names of the individual you want to silence, slicing open the tongue, and placing the paper inside. “You can also fill a large glass jar with vinegar and store the beef tongue in there to make your enemies’ words turn against them and to make them suffer for what they have said.”

[logan9a]

Huh.