SEC Accuses Ex-Advisor of $300M Ponzi Scheme

The Securities and Exchange Commission has obtained a preliminary injunction and asset freeze against Drive Planning LLC and its founder and CEO, Russell Todd Burkhalter, to halt an alleged $300 million Ponzi scheme that affected over 2,000 investors and funded Burkhalter’s lavish lifestyle, the agency announced.

Burkhalter used misappropriated investor assets to buy a yacht and make other expensive purchases, and to make Ponzi-like payments, the commission announced Wednesday.  The court has appointed a receiver for Drive Planning, which is based in greater Atlanta and has an office in St. Petersburg, Florida, per its LinkedIn profile.

According to the  SEC’s Investment Advisor database, Burkhalter became an RIA in 2008 with OneAmerica Securities; his last affiliation was with Ashworth Sullivan Wealth Management Group in 2014.

The SEC’s complaint, filed in U.S. District Court for the Northern District of Georgia, alleges that from 2020 through at least June, Drive Planning and Burkhalter raised more than $300 million for purported real estate investments, telling investors that their money would be used to fund land development projects.

The defendants promised 10% interest every three months and encouraged investors to tap their savings and retirement accounts and to open lines of credit to invest.

In reality, Burkhalter and Drive had no business capable of ]generating the promised returns and instead used investor funds to make Ponzi-like payments, the SEC alleged in the complaint and a news release.

The complaint alleges that Burkhalter stole investor funds to purchase a $3.1 million yacht and to spend $4.6 million on chartering private jets and car services, as well as $2 million on a condo. 

The SEC’s complaint charges Drive Planning and Burkhalter with violating the Securities Act of 1933 and the Securities Exchange Act of 1934.

In addition to the emergency relief that the court granted, which the defendants didn’t oppose, the SEC said it seeks permanent injunctions, disgorgement of ill-gotten gains with interest, civil penalties against the defendants and an officer-and-director bar against Burkhalter.

The complaint also names Jacqueline Burkhalter, Burkhalter’s spouse, and several related entities as relief defendants and seeks disgorgement of ill-gotten gains from them. The SEC’s investigation is ongoing.

Burkhalter and Drive did not return messages sent to them through their LinkedIn accounts as of publication time.

“While we cannot disclose specific details about the matter, Mr. Burkhalter cooperated with the SEC in submitting the receivership and preliminary injunction orders to the court. Mr. Burkhalter denies the allegations contained in the SEC’s complaint and looks forward to quickly resolving this matter,” Burkhalter’s lawyers, Aaron M. Danzig and Kara Silverman from Arnall Golden Gregory LLP, told ThinkAdvisor by email Thursday.

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