Acting U.S. Attorney Stephen M. Schenning announced Tuesday that a former financial advisor has been arrested and charged with fraud connected to an alleged Ponzi scheme.
Fifty-five-year-old Dawn J. Bennett of Chevy Chase was apprehended in Santa Fe, New Mexico on Friday. Bennett owns DJB Holding LLC, which is doing business as DJBennett.com, a luxury sportswear website.
A Securities and Exchange Commission complaint alleges Bennett operated a Ponzi scheme, misappropriating investor funds. She solicited people to invest money into DJBennet.com and offered them an annual rate of 15% rate. Twenty-eight people deposited more than $5 million into her Internet clothing business between December 17, 2014 and October 29, 2015, according to the criminal complaint.
Bennett repaid investors with funds from new investors and utilized the funds from individual investors to finance her personal legal expenses and other things. DJB Holdings LLC secured a $750,000 line of credit in May 2015 with a brokerage statement in her name that listed a portfolio valued over $4 million. At the time, Bennett’s net portfolio value for that account was worth $35, according to the SEC criminal complaint.
The lender declared the loan in default in February 2016. Bennett contacted the lender and told them she had been in China for eight months, but in fact she had been in the Washington, D.C. and Chevy Chase areas. Her location was confirmed through American Express transactions, according to the criminal complaint.