More than 2,000 people poured about $380 million into investment opportunities they were told were backed by real estate and capable of producing guaranteed double-digit returns.
Instead, federal prosecutors say Drive Planning LLC founder Todd Burkhalter operated what was likely the largest Ponzi scheme in Georgia history, using new investor money to pay earlier investors while millions also financed an extravagant personal lifestyle, according to WABE.
Burkhalter encouraged people to invest savings and retirement money, take early distributions and borrow at high interest rates. His company’s largest investment opportunity promised a 10% return every three months while claiming investors’ money was fully secured by real estate.
Burkhalter, 55, has now been sentenced to 20 years in federal prison, the maximum allowed by law for the wire-fraud count to which he pleaded guilty. Two senior Drive Planning employees were also sentenced to prison for their roles in the operation.
The Investment Promised 10% Every Three Months
Drive Planning marketed several investment opportunities between September 2020 and June 2024, with its Real Estate Acceleration Loan, or REAL, becoming the company’s primary vehicle.
The company told investors that their money would finance short-term bridge loans for real estate developers who needed quick funding to complete existing projects or start new ones. REAL supposedly guaranteed investors a 10% return every three months.
The U.S. Attorney’s Office for the Northern District of Georgia said Drive Planning also reassured investors that their money was fully collateralized by real estate. Drive Planning also allegedly misrepresented its relationship with a well-known Atlanta real estate developer and claimed investments were secured by properties in that developer’s portfolio.
The Ponzi Scheme Started With the First $50,000 REAL Investment
Federal prosecutors say REAL was being operated as a Ponzi scheme from its very beginning. When Drive Planning received its first $50,000 REAL investment in September 2020, Burkhalter used at least $21,000 of it to repay an earlier Drive Planning investor. Prosecutors say none of the REAL money was used for its stated purpose of financing bridge loans or entering joint ventures with real estate developers.
Instead, money from investors was used to pay other Drive Planning investors, cover commissions for the company’s agents and fund personal expenses. Within the first few months of marketing REAL, prosecutors say Burkhalter had already used at least $80,000 in investor money for his ex-wife’s attorneys and expenses connected to recreational vehicles.
The company also marketed a separate Cash Out Real Estate Fund, or CORE Fund, which supposedly provided passive income from tax liens. Investors were promised either a 10% return every six months or a 22% annual return for up to three years.
Prosecutors say Drive Planning continued accepting CORE Fund investments even though it stopped investing money in that fund after approximately Dec. 9, 2022. The company ultimately received at least $4.1 million from people seeking to invest in CORE.
People Were Encouraged to Use Retirement and College Money
Prosecutors said Burkhalter encouraged people to take early distributions from retirement accounts, use their savings and borrow significant sums at high interest rates. Some were even encouraged to deplete money set aside for their children’s college expenses.
The Securities and Exchange Commission sued Drive Planning and Burkhalter in August 2024 after alleging that the company had raised more than $300 million for purported real estate investments while promising 10% returns every three months.
The SEC had begun investigating Drive Planning around March 2024. Federal prosecutors say Burkhalter and others nevertheless continued soliciting tens of millions of dollars for REAL and the CORE Fund while that investigation was underway. By the end of the scheme, prosecutors said more than 2,000 investors had been defrauded of approximately $380 million.
Investor Money Paid for a Yacht, Luxury Condo and Vehicles
Millions of dollars that investors thought were supporting real estate deals instead helped finance Burkhalter’s personal spending. Prosecutors said approximately $2 million went toward a yacht, while another $2.1 million was used as part of the purchase of a luxury condominium in Cabo San Lucas, Mexico.
Another roughly $800,000 went toward luxury vehicles, including a 2020 Prevost Marathon motorcoach and two 2024 Land Rovers. Burkhalter also spent millions on luxury travel, including private jets, along with approximately $320,000 on clothing, jewelry and beauty treatments.
Burkhalter Received the Maximum 20-Year Sentence
Burkhalter pleaded guilty to one count of wire fraud in January. U.S. District Judge Tiffany R. Johnson sentenced him on Aug. 14 to 20 years in federal prison, followed by three years of supervised release.
He was also ordered to pay $233,777,763.82 in restitution to victims. A court-appointed receiver is separately working to recover funds and sell assets in an effort to return additional money to Drive Planning investors.
Two Other Drive Planning Executives Are Going to Prison
David Bradford, 53, of Peachtree Corners, Georgia, served as Drive Planning’s chief operating officer and pleaded guilty to conspiracy to commit wire fraud over his role in the CORE Fund scheme.
Bradford received four years and three months in federal prison, followed by three years of supervised release. He was ordered to pay $4,297,878.16 in restitution to victims.
Julie Edwards, 59, of Cumming, Georgia, was the company’s chief administrative officer. She pleaded guilty to laundering proceeds from the Ponzi scheme and received two years in prison, followed by three years of supervised release. She was ordered to pay $630,000 in restitution. All three federal prison terms will be served without the possibility of parole.
A ‘Guaranteed’ High Return Should Trigger More Questions, Not Fewer
The SEC’s Investor.gov warns that promises of high returns with little or no risk, unusually consistent returns and supposedly guaranteed investment returns are common warning signs of Ponzi schemes. Investors should independently verify claims about collateral. If an investment is supposedly secured by specific real estate, that means confirming that the property actually exists, determining who owns it and understanding what legal interest, if any, protects investors if the investment fails.
The SEC also recommends researching both the investment and the people selling it before committing money. Investor.gov’s investment-fraud checklist identifies unlicensed investment professionals, promises of guaranteed returns, “risk-free” opportunities and pressure to invest quickly as warning signs that require additional scrutiny.
Using retirement funds, college savings or borrowed money can magnify the damage if an investment collapses. Before taking an early retirement distribution or borrowing at a high interest rate to invest, investors should consider the possibility of losing the investment while still facing taxes, penalties or debt obligations associated with obtaining the money. Anyone who suspects an investment operation may be fraudulent can report it to the SEC.