According to the SEC Complaint and Criminal Complaint, Dawn Bennett lived the life a classic ponzi schemer who got in over her head and continued to lie and cheat, perhaps hoping to find a way out. The story caught my attention for two reasons. The first was the implication that Ms. Bennett used a voodoo spell to ward off attorneys from the Securities and Exchange Commission. The second was reference to an influential blog post.
To prove how egregious her fraud was, the criminal complaint highlight two well-worn stories of fraud. One was that she defrauded elderly investors. To prove that point, there are several emails in the criminal complaint that tell the sad story of elderly investors sending all of their retirement savings to Ms. Bennett for investment in her company.
The second story is that of a luxurious lifestyle. To prove that point, there is a picture of her large collection of shoes taken during the FBI search of her home.
The criminal complaint notes that Ms. Bennett had read a blog post on whether a note is a security. Based on that blog post, she changed her documents in an attempt to make them look more like a loan than a security. The blog post sounded familiar: “Is A Promissory Note A Security?” I searched Compliance Building and found this blog post: Is a Note a Security? I was ready to be self congratulatory and tout my influence. But a quick internet search found a more likely blog post: Is Our Promissory Note A Security? by A. O. Headman. It’s also much better written. <sigh>
But there was still the voodoo to keep my attention. The FBI agents found Ms. Bennett’s freezer to be full of unusual jars.
The FBI agents found documents with instructions on how to place individuals under hoodoo spells. (Hoodoo is the less religious take on Voodoo.) The jars contained identifying information for the SEC attorneys that were investigating Ms. Bennett and I suppose other items that were part of the hoodoo spell. The FBI believes it was the beef tongue shut up hoodoo spell that involveds beef tongue and had-written notes.