Litigation Releases (Drive Planning, LLC and Russell Todd Burkhalter)

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26076 / August 14, 2024

Securities and Exchange Commission v. Drive Planning, LLC and Russell Todd Burkhalter, No. 1:24-cv-03583 (N.D. Ga. filed Aug. 13, 2024)

SEC Charges Russell Todd Burkhalter and his Atlanta Firm Drive Planning with $300 Million Ponzi Scheme and Obtains Emergency Relief

The Securities and Exchange Commission today announced that it obtained a preliminary injunction, asset freeze, and other emergency relief against Drive Planning LLC and its founder and CEO, 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 fund Burkhalter's lavish lifestyle and to make Ponzi-like payments.

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. The defendants promised 10% interest every 3 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.

The SEC's complaint, filed in the U.S. District Court for the Northern District of Georgia, charges Drive Planning and Burkhalter with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. 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 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 of this matter is ongoing and is being conducted by Austin Stephenson and Cody Turley, under the supervision of Peter Diskin and Justin Jeffries, of the SEC's Atlanta Regional Office. The litigation will be led by Pat Huddleston and H.B. Roback, under the supervision of M. Graham Loomis.