$300M Ponzi funded a private-jet-and-yacht lifestyle, SEC says

A Florida insurance agent and his Georgia-based business built up a $300 million Ponzi scheme funded by more than 2,000 unwitting investors, the SEC said in charges filed this week.

Russell Todd Burkhalter, the owner of Drive Planning, not only used investors’ money to pay off others in the alleged Ponzi scheme, but he also pocketed millions for himself – funding real estate, buying a $3 million yacht, and hiring private jets, the Securities and Exchange Commission claims.

The company and its agents pitched “bridge loans” for real estate developers to investors, who were promised returns of 10 percent every three months, according to court records. Clients had to provide a minimum of $20,000 and were encouraged to use assets from their retirement accounts or even to use lines of credit to make the purchase, the SEC said.

“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 Regional Office, in a statement. “Investors should be vigilant when they encounter aggressive sellers who make over-the-top sales pitches and promise high rates of guaranteed returns.”

An email to Burkhalter was referred to his lawyers, who responded to InvestmentNews with a statement acknowledging the SEC's complaint.

"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," wrote Aaron Danzig and Kara Silverman. "Mr. Burkhalter denies the allegations contained in the SEC’s complaint and looks forward to quickly resolving this matter."

Drive Planning's website was locked and inaccessible as of Thursday. The SEC contracted Burkhalter in April to notify him about the Ponzi investigation, and he agreed to stop accepting investors on June 10, according to the complaint. However, he paid sales commissions to his company’s agents 11 days later, and he has a divorce settlement that could cause potentially divert some of the investors’ assets out of his accounts, the SEC said. Because of that, the agency’s court granted a preliminary injunction and asset freeze, it stated.

The SEC also named Burkhalter’s former spouse, Jacqueline Burkhalter, as well as The Burkhalter Ranch Corporation, Drive Properties, Drive Gulfport Properties, and TBR Supply House as relief defendants from which it will try to recoup investors’ money.

Some of the other ways that Burkhalter allegedly misappropriated investors’ money included spending more than $300,000 on luxury clothes, jewelry, and beauty treatments, nearly $750,000 on cars, $4.6 million on travel, and transfers of $1.2 million to an account with Coinbase.

In May, Burkhalter published a video on Instagram of a Hawaiian getaway for Drive agents, noting that the firm would be opening an office in the state. The company has advertised itself at Tampa Bay Rays games and by sponsoring an Indy car.

Burkhalter also posted about his private jet trips on Twitter and expressed dissatisfaction with his treatment on a United international flight in the first-class section.

“Worst treatment ever and I’m paying for international first class. Rudest crew ever,” a post from his account read.

“Talk about a woke sensitive group/company! @united may be the most pansy group ever.”

There was also a post to that account in October 2022 without context: “You cannot attract financial abundance with a scarcity mindset.”

And another from that year: “Having multiple streams of income is literally like having a money tree. Assets that pay you each week or month is [like] going out and shaking the tree! If you want to know how … myself or our team at Drive Planning can help.”