SEC Charges Atlanta-Based Firm and Its CEO With $300 Million Ponzi Scheme
The U.S. Securities and Exchange Commission announced that it obtained a preliminary injunction, asset freeze, and other emergency relief against Atlanta-based Drive Planning LLC and its founder and chief executive officer, Russell Todd Burkhalter, to halt a $300 million real estate Ponzi scheme impacting more than 2,000 investors. Additionally, a receiver was appointed over Drive Planning. The SEC alleges the defendants misappropriated millions of dollars of investor funds to bankroll Burkhalter’s lavish lifestyle and to make Ponzi-like payments.
Drive Planning also has offices in Florida and Indiana, according to its website.
“Drive Planning and Burkhalter gained the trust of everyday people and encouraged them to invest in this scheme by promising exorbitant returns, but as our complaint alleges, the defendants’ business was nothing more than a classic Ponzi scheme, using new investor money to pay returns to existing investors, with Burkhalter stealing millions to fund a lavish lifestyle,” said Nekia Hackworth Jones, director of the SEC’s Atlanta office.
The SEC’s complaint alleges that, from 2020 through at least June 2024, Drive Planning and Burkhalter raised more than $300 million for purported real estate investments, telling investors their money would be used to fund land development projects through what they called ‘real estate acceleration loans,’ or REAL.
The complaint alleges that the defendants and the sales agents they trained falsely told customers it would pool [investors’] money and loan it out to property developers, and/or enter into joint ventures with property developers, and thereby generate the profit necessary to meet obligations to REAL investors.
The defendants allegedly promised 10% interest every three months and encouraged investors to tap their savings, retirement accounts, and even open lines of credit to invest. In reality, the defendants did not have a business capable of generating the promised returns, and they instead used investor funds to make Ponzi-like payments, according to the complaint.
The complaint further alleges that Burkhalter stole investor funds to fund his luxurious lifestyle, including to buy a $3.1 million yacht and spending $4.6 million on chartering private jets and luxury car services and $2 million on a luxury condo.
“Investors should be vigilant when they encounter aggressive sellers who make over-the-top sales pitches and promise high rates of guaranteed returns,” added Jones.
While Burkhalter pledged, on June 10, 2024, to cease accepting new investments in REAL, and to cease paying commissions or paying supposed returns to investors, he nevertheless paid sales commissions to Drive Planning sales agents on June 21, according to the complaint. Moreover, Burkhalter remains a signatory on bank accounts containing millions of dollars of investor funds and has recently entered into a divorce settlement pursuant to which he may transfer to his spouse, Jacqueline Burkhalter, property bought with investor funds. The SEC accentuated “a serious risk of dissipation of assets that could, if preserved, help fund investor redress” and followed through with emergency relief.
As a result, an asset freeze was applied and a receiver was appointed over Drive Planning “to gather, preserve, and protect whatever assets still exist for the benefit of the victims of the defendants’ Ponzi scheme.”
The SEC’s complaint, filed in the U.S. District Court for the Northern District of Georgia, charges Drive Planning and Burkhalter with violating the antifraud provisions of the federal securities laws. In addition to the emergency relief granted by the court, which the defendants did not oppose, the SEC seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties against the defendants, and an officer-and-director bar against Burkhalter. The complaint also names Burkhalter’s spouse and several related entities as relief defendants and seeks disgorgement of ill-gotten gains from them.
In April 2020, Burkhalter released a book, “Bullet Proof Your Finances: Confidence in Creating Financial Security,” which is currently available on Amazon.
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