He was part of $20-million Ponzi Scheme.
Greenbelt, Md (KM) A Frederick man was sentenced on Wednesday in US District Court in Greenbelt to two-and-a-half years in prison for conspiracy to commit securities fraud and making a false statement. Bradley Mascho, 53, will be on three-years supervised release after he gets out of prison, and must pay restitution of $4,824,131. .
The US Attorney’s Office for Maryland says Mascho and Dawn Bennett, 56, of Chevy Chase worked at Bennett Financial Services LLC, which provided investment advice and financial services to clients in Maryland and other states. In 2013, they formed DJB Holdings. Mascho acted as Chief Financial Officer.
Between December, 2014 and April, 2017, Bennett and Mascho enticed individuals to make investments into the company, offering an annual interest of 15% through convertible promissory notes. In order to get people to invest, they made false and misleading statements about how investors’ funds were being used, while concealing the company’s true financial condition, federal prosecutors say. .
They solicited more than $20-million from 40 different investors. But they misappropriated that money. Prosecutors say Bennett, and some extent, Mascho, used it to pay personal expenses. The two also used the funds to repay previous investors with money from new investors, which is the definition of a Ponzi Scheme.
The US Attorney’s Office says Mascho admitted that he lied under oath to the Securities and Exchange Commission in a deposition related to an investigation into DJB Holdings and Bennett. Prior to the deposition, Mascho said he spoke to Bennett about his testimony, and the false statements made to the SEC were under Bennett’s direction and her insistence.
Bennett was sentenced on July 31st, 2019 to 20-years in federal prison followed by five-years of supervised release. She must also pay restitution of $14,504,290, and forfeit $14,306,842. Bennett had been convicted on October 17th, 2018 of 17 federal charges, including conspiracy, securities fraud, wire fraud, bank fraud and making false statements on a loan application.
By Kevin McManus