Former Financial Adviser Now Facing Years in Prison for $20M Investor Fraud
Dawn Bennett, an ex-financial adviser and the operator of Bennett Financial Group Services, has been convicted of 17 criminal charges, including securities fraud, conspiracy, bank fraud, wire fraud, and making false statements on a loan application. It took a federal jury less than five hours to convict her for a $20M ponzi scam that defrauded nearly four dozen investors, including many older investors and retirees. Some of her advisory clients took money out of their retirement accounts to invest with Bennett.
Prosecutors contend that the former financial adviser, who is also an ex-radio show host, used investors’ money to pay back earlier investors in Ponzi-like fashion and to fund her luxury lifestyle. This purportedly included paying priests in India to conduct religious ceremonies to keep regulators away, a $500K luxury suite at the Dallas Cowboys’ stadium, and cosmetic surgery procedures.
Bennett is accused of persuading clients to financially back her sports apparel company, DJB Holdings, also known as Province of the Dragon. Investors were promised 15% yearly returns.
The US Securities and Exchange Commission also has filed a civil securities fraud case against Bennett. Meantime, the Financial Industry Regulatory Authority suspended her after she failed to cooperate with its probe into misconduct allegations.
Investment Advisor Admits to $6.1M Ponzi Scam
Edward Lee Moody Jr., the owner of CM Capital Management and a registered investment adviser, has pleaded guilty to mail fraud and taking part in monetary transactions involving property that was criminally derived. Moody ran a $6.1M ponzi scam that defrauded over 50 investors.
According to the US Department of Justice, Moody told investors that he would invest their funds in securities and oversee the investments. Instead, over 13 years he operated a Ponzi scam during which time 53 investors gave him $6.1M. At least 13 of these people were older investors who liquidated assets from their retirement accounts to invest with Moody.
The investment adviser then used the funds for his own use, including business expenses, car loan payments, travel, and to buy a home. Moody spent over $800K of investors’ money to buy and sell securities for himself and another $1.5M from newer investors to pay earlier investors.
The SEC filed civil charges against him a few months ago.
Investment Adviser Alleged Defrauded His Own Friends
The SEC announced that it has filed charges against Bruce J. Fixelle and Genesis Advisory Services Corp., which he operates. Fixelle and Genesis Advisory Services settled the investor fraud charges and will pay over $1.5M in civil penalties, prejudgment interest, and disgorgement.
The SEC’s complaint contends that Fixelle targeted friends he knew through a local community group. He allegedly told them that not only would he invest their money, but also he would use a trading strategy that was “safe and successful.” Instead, he allegedly used their funds for his own spending and to pay back debt that he owed.
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Investment Advisor Pleads Guilty to $6.1 Million Ponzi Scheme, Justice.gov, October 16, 2018
Former Financial Advisor Convicted of All Federal Charges Related to $20 Million Ponzi Scheme, Justice.gov., October 17, 2018