The Atlanta-based founder and CEO of Drive Planning is running a $300 million real estate Ponzi scheme affecting more than 2,000 investors, according to the Securities and Exchange Commission.
The commission placed a preliminary injunction and asset freeze on Russell Todd Burkhalter to halt the alleged Ponzi scheme. According to the SEC, Burkhalter, via Drive Planning, used millions of dollars from new investors to pay existing stakeholders and fund his wealthy lifestyle, including charter jets and yacht purchases.
“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 defendant’s 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,” SEC Atlanta Regional Office Director Nekia Hackworth Jones said.
According to the complaint filed in Georgia federal court Tuesday, the scheme began in 2020 with the formation of Drive Planning.
Burkhalter and his recruited sales agents told prospective investors the firm would pool their money and loan it to property developers or enter “joint ventures” with property developers to raise enough profit for guaranteed three-month returns of 10%.
Burkhalter called the securities “REAL” (an acronym for Real Estate Acceleration Loan). Burkhalter had previously been a managing partner with Catalyst Wealth Management through 2014, according to the Drive Planning website. Burkhalter did not return answers to questions prior to publication.
Customers began investing in fall 2020, and over the next four years, the business boomed; by May 2024, the firm raised more than $336 million from more than 2,000 investors in 48 states and other countries, with nearly $67 million coming out of retirement accounts, according to the SEC.
According to bank records, Drive Planning wasn’t using the cash from investments for bridge loans or joint ventures with developers and wasn’t receiving much income in return. Instead, its revenue sprang from commissions earned from life insurance sales, membership fees from clients getting financial planning and rental income from several properties.
However, clients expected a 10% return every three months, so Burkhalter began using new clients’ investments to make up the difference in a Ponzi-like fashion, according to investigators. Over four years, the SEC believed that as much as $137.2 million came from investors’ funds to pay other investors.
But Burkhalter (via the firm) used investors’ funds for other personal purchases, according to the SEC.
In 2023, Burkhalter used Drive Planning to purchase a yacht named “Stillwater,” using at least $2 million from investor funds (Burkhalter renamed the yacht “Live More”).
Burkhalter made numerous other purchases over the next several years, using money from Drive Planning accounts used to hold investor funds. Regulators believe he was using those funds $319,628 worth of “clothing, jewelry, and beauty treatments,” including $69,293 at Diamonds Direct, $75,785 at Louis Vuitton, and $7,777 at Drip IV, a beauty and wellness company in St. Petersburg, Fla.
Burkhalter and the firm also spent $4.6 million on chartering private jets and car services and $183,871 on hotels (including approximately $15,400 to a Norweigan cruise line). Burkhalter and his firm spent at least $749,243 on car-related expenses, including over $92,000 at a Jaguar Land Rover dealer and $243,414 at Crown Automotive in St. Petersburg, Fla.
Burkhalter used investor funds to buy a ranch in Mineral Bluff, Ga., and to build a large barn that doubles as an event space on that property. According to the SEC, he also used investor funds to buy a Georgia-based clothing business.
According to the commission, during this time, Burkhalter didn’t tell clients that the money could be used to make principal or interest payments to other investors or to fund personal expenses. In one case, he told a client the 10% rate of return was “guaranteed.”
On June 10, Burkhalter allegedly told the SEC the firm wouldn’t accept new investments, pay amounts due to investors, or pay sales agents’ commissions. However, according to the SEC, the firm continued to pay those commissions.
Burkhalter allegedly sent an email to sales agents that the SEC was reviewing the program and reportedly said the firm could get Drive Planning clients their payments “in a timely manner” if not for the SEC’s review (though the commission argued this would just mean a continuation of the Ponzi scheme).
“Burkhalter still has control over the tens of millions of dollars currently in Drive Planning’s bank accounts, as well as over the tens of millions of dollars’ worth of real estate and other property purchased with investor funds,” the commission’s complaint argued.
