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A man from Maryland was sentenced to 30 months in prison for his role in a Ponzi scheme that defrauded investors for more than $ 20 million, the Justice Department announced this week.
Bradley Mascho, 53, pleaded guilty in June 2018 to charges of conspiracy to commit securities fraud and made a false statement to the Securities and Exchange Commission (SEC). He was sentenced Wednesday in Greenbelt, Maryland, in federal court.
Prosecutors say Mascho has admitted working with investment advisor Dawn Bennett to solicit $ 20 million from more than 40 different investors at Bennett's online luxury sportswear store, DJBennett.com, between December 2014 and April 2017. This money was used to pay Bennett and Mascho's personal expenses and reimburse previous investors, although prosecutors noted that Mascho had diverted funds "to a lesser extent" than Bennett.
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"This corresponds to a Ponzi scheme – a fraudulent investment scheme in which the stratagem operator solicits investors by promising high rates of return with little risk," said the Justice Department. "The system operator then finances payments to previous investors with funds raised from new investors. In general, the system operator will use investment funds for purposes other than those disclosed to investors. "
The FBI opened an investigation into Bennett in December 2015 after the SEC officially accused it of defrauding investors by inflating the amount of assets it was managing and exaggerating the return on investment from his clients.
Prosecutors said that Bennett had not told investors of his luxury sportswear company that she was using their money to pay other investors or to cover their personal expenses, including more than $ 141,000 in astrological gems, more than $ 100,000 in cosmetic surgery procedures and a $ 500,000 annual lease for a luxury suite at the Dallas Cowboys Stadium.
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In an affidavit from an FBI agent, investigators discovered at Ms. Bennett's home that she had attempted to silence SEC investigators by paying over $ 800,000 for prayers from Hindu priests. India to dismiss federal investigators.
Bennett, 56, was convicted of securities fraud, wire and banking last October and sentenced to 20 years in jail on July 31. She was also ordered to pay more than $ 14.5 million and lose $ 14.3 million.
Associated Press contributed to this report.
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