SEC Halts $300 Million Ponzi Scheme Orchestrated by Atlanta-Based Firm Drive Planning LLC

tamir
Wed, 14 Aug 2024 14:42:08 +0000
Ponzi, SEC, United States, Drive Planning, Jacqueline Burkhalter, Russell Todd Burkhalter

The U.S. SEC has taken decisive action against Atlanta-based Drive Planning LLC and its founder, Russell Todd Burkhalter, for orchestrating a $300 million Ponzi scheme that defrauded more than 2,000 investors. The SEC has obtained a preliminary injunction, an asset freeze, and other emergency relief measures to prevent further harm to investors, while a receiver has been appointed to oversee the operations of Drive Planning.

The U.S. Securities and Exchange Commission (SEC) has taken decisive action against Atlanta-based Drive Planning LLC and its founder, Russell Todd Burkhalter, for orchestrating a $300 million Ponzi scheme that defrauded more than 2,000 investors. The SEC has obtained a preliminary injunction, an asset freeze, and other emergency relief measures to prevent further harm to investors, while a receiver has been appointed to oversee the operations of Drive Planning.

Key Points:

Massive Ponzi Scheme: Drive Planning LLC and its founder defrauded over 2,000 investors out of $300 million.

Lavish Spending: Burkhalter misappropriated investor funds to finance a luxurious lifestyle, including yachts, private jets, and luxury properties.

SEC Action: The SEC has obtained emergency relief and seeks further legal measures to hold Burkhalter and his associates accountable.

Investors are reminded to exercise caution and thoroughly vet investment opportunities, especially those that promise unusually high returns.

The Case Narrative

According to the SEC’s complaint, Drive Planning and Russell Todd Burkhalter lured investors by promising extraordinary returns on purported real estate investments. From 2020 through at least June 2024, the defendants raised over $300 million by convincing investors that their funds would be used for land development projects. The scheme promised a 10% interest return every three months, leading many investors to deplete their savings, retirement accounts, and even open lines of credit to participate.

From 2020 through at least June 2024, Defendant Russell Todd Burkhalter (“Burkhalter”) ran a Ponzi scheme through his business, Drive Planning, LLC (“Drive Planning”), selling unregistered securities in the form of “Real Estate Acceleration Loans” (“REAL”), which Burkhalter described in promotional materials as a “bridge loan opportunity promising 10% in 3 months.” As of the end of June 2024, over 2,000 investors had invested more than $300,000,000 in REAL. (SEC Complaint)

However, the SEC alleges that Drive Planning was a facade, with no legitimate business operations capable of generating the promised returns. Instead, Burkhalter used new investor funds to pay off earlier investors, creating the illusion of a successful investment while siphoning millions for his personal luxury. The complaint details Burkhalter’s extravagant spending, including the purchase of a $3.1 million yacht, $4.6 million on private jets and luxury car services, and $2 million on a luxury condominium.

The SEC has charged Drive Planning and Burkhalter with violating federal securities laws’ antifraud provisions. In addition to the emergency relief, the SEC seeks permanent injunctions, disgorgement of ill-gotten gains, civil penalties, and a bar against Burkhalter from serving as an officer or director of any public company. Burkhalter’s spouse, Jacqueline Burkhalter, and several related entities are also named as relief defendants, with the SEC seeking to recover the funds they received.