SEC Charges Atlanta-Based Company With $300 Million Ponzi Scheme

The headquarters of the U.S. Securities and Exchange Commission (SEC) in Washington, on May 12, 2021. Andrew Kelly/Reuters

The Securities and Exchange Commission (SEC) has obtained a court order freezing the assets of Drive Planning LLC and other forms of emergency relief after accusing the Atlanta-based company of running a $300 million Ponzi scheme that affected more than 2,000 investors.

Judge Victoria Calvert of the U.S. District Court for the Northern District of Georgia issued two orders on Aug. 13 granting the SEC’s motion for a preliminary injunction freezing the company’s assets, appointing a receiver, and granting other emergency relief.

The SEC accused Drive Planning and its CEO, Russell Todd Burkhalter, of misappropriating millions of dollars of investor funds that were supposed to be used for real estate investments, but were instead used to make Ponzi-like payments and fund what the SEC described in a statement as Burkhalter’s “lavish lifestyle.”

“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,” Nekia Hackworth Jones, director of the SEC’s Atlanta Regional Office, said in a statement.

The SEC filed its complaint at the Atlanta-based district court on Aug. 13, accusing Burkhalter of running a Ponzi scheme through his business by selling unregistered securities in the form of “Real Estate Acceleration Loans” (REAL) that promised returns of 10 percent in three months in promotional materials.

In early May 2024, the REAL scheme was receiving applications for more than $1 million a day, and by the end of June, more than 2,000 investors had put more than $300 million into the scheme, according to the filing.

Burkhalter and other defendants allegedly told investors that their money would be used to fund land development projects, but the defendants used it to make Ponzi-like payments, while also stealing some to buy a $3.1 million yacht, spend $4.6 million on private jets and luxury car services, and purchase a $2 million luxury condo, according to the SEC.

The SEC’s complaint charges Burkhalter, Drive Planning, and other defendants with violating antifraud provisions of federal securities laws.

The complaint also names several related entities and Jacqueline Burkhalter, Burkhalter’s spouse.

The judge granted the SEC’s request for preliminary injunctions for an asset freeze and the appointment of a receiver. The agency is also seeking permanent injunctions, disgorgement of ill-gotten gains plus interest, civil penalties against the defendants, and a prohibition against Burkhalter from serving as an officer or director of a publicly traded company.

Attorneys for Burkhalter didn’t respond to a request for comment.

The SEC said that its motion for a preliminary injunction was unopposed by defense counsel.