Defrauded investors have received some positive news after learning that the advisers who scammed them are set to spend many years behind bars and have been ordered to pay restitution, reports our sister publication Investment News.
Maryland-based Dawn Bennett has been sentenced to 20 years in prison after she was found guilty of 17 different federal charges related to a $20m (£16.5m, €18m) scam.
They include conspiracy, securities fraud, wire fraud, bank fraud and making false statements on a loan application.
She was given the maximum possible sentence, in addition to five years of supervised probation once she is released.
The District of Maryland judge ordered her to pay a restitution of $14.5m and forfeit $14.3m.
According to the court case, Bennett offered investments in her online clothing business with an annual interest rate of 15% via convertible or promissory notes – a debt instrument that allows conversion to equity in the company that issues them.
She, however, concealed the real financial situation of her businesses from investors.
Fraud galore
In a separate case, Hector May, head of registered investment adviser New York RIA has been sentenced to 13 years in prison after pleading guilty to his involvement in a Ponzi scheme last December.
He has also been ordered to pay back $8.4m.
He persuaded more than 15 investors to turn over $11.5m from their securities accounts and told them they would have been used to buy bonds and other investments.
He confessed to conspiracy to commit wire fraud and investment adviser fraud.
But the judge did not add a fine on top of May’s sentence as he said the fraudster should use all the money he has to pay back investors.
