A man who pleaded guilty in what authorities said was likely the largest Ponzi scheme in Georgia history has been sentenced, reports Wealth Management.
The Justice Department said 55-year-old Todd Burkhalter, the founder and CEO of financial planning firm Drive Planning, was sentenced to 20 years in federal prison, the maximum allowed by law. He was found to have orchestrated a years-long Ponzi scheme that resulted in thousands of investors losing about $380 million.
Burkhalter pleaded guilty to wire fraud for using his firm to carry out several fraudulent investment schemes and using the money to finance a lavish lifestyle that included purchases of a $2 million yacht, a $2.1 million condo in Mexico, a motorcoach, and other luxury vehicles. Additional millions were spent on private jet travel, jewelry, designer clothing and beauty treatments.
The U.S. Attorney’s Office for the Northern District of Georgia said Burkhalter defrauded more than 2,000 people between September 2020 and June 2024, many of whom were encouraged to invest their retirement savings and life insurance proceeds.
The scheme centered on two primary investment vehicles offered by Drive Planning: the “Real Estate Acceleration Loan” (REAL) and the “CORE Fund.” Prosecutors said Burkhalter promised steady returns for investors by claiming the money funded bridge loans for real estate developers.
According to the U.S. Attorney, Drive Planning claimed that investing in REAL and the CORE Fund was “easy and simple,” telling prospective investors that they did not need to be accredited investors to participate and encouraging them to invest money from retirement accounts, savings, and lines of credit. Burkhalter claimed the loans were short-term, fully collateralized and secured by real property. To perpetuate these claims, Burkhalter directed Drive Planning to prepare fraudulent “collateral sheets” identifying properties, some of which did not even exist, with fictitious valuations that purportedly served as collateral for investments.
Instead, prosecutors said, Burkhalter operated REAL as a Ponzi scheme from its inception. “In September 2020, after Drive Planning received its first $50,000 investment in REAL, Burkhalter used at least $21,000 to repay an earlier Drive Planning investor,” the U.S. Attorney said. “None of the REAL funds were used for their supposed intended purpose—to finance bridge loans or enter joint ventures with real estate developers. Instead, within the first couple of months of marketing REAL, Burkhalter used at least $80,000 in investor money to pay his ex-wife’s attorneys and expenses related to recreational vehicles.”
In the case of the CORE Fund, Drive Planning falsely claimed that it provided “100% Passive Income from Tax Liens,” and that investors were guaranteed a return of 10% every six months or a 22% return per year for up to three years. Drive Planning further misrepresented that investors’ contributions to the CORE Fund were pooled together, government-protected, and fully collateralized. Burkhalter and others at Drive Planning failed to disclose that Drive Planning did not invest any funds in the CORE Fund after approximately December 9, 2022, yet they continued to solicit new funds.
Even after the SEC started investigating Drive Planning in approximately March 2024, Burkhalter and others continued to solicit tens of millions of dollars in investments for REAL and the CORE Fund.
In August 2024, the SEC obtained a temporary restraining order against Drive Planning and filed civil enforcement actions in federal court against Drive Planning and others related to the scheme.
“Todd Burkhalter lured investors to send millions of dollars to Drive Planning for investments that he knew didn’t actually exist,” said U.S. Attorney Theodore S. Hertzberg. “He promised investors that they were guaranteed substantial returns on their investments, and he ruthlessly encouraged them to deplete their kids’ college funds, take early distributions from retirement accounts, and borrow significant sums at high interest rates. The sentences in this case should discourage other financial advisors from choosing insatiable greed and lies over honest investment strategies.”
The sentence handed down by U.S. District Judge Tiffany R. Johnson includes the two decades in federal prison without the possibility of parole to be followed by three years of supervised release. Burkhalter was also ordered to pay $233,777,763.82 in restitution to victims.
Two other top executives of Drive Planning, David Bradford and Julie Edwards, were also sent to federal prison for their roles in the scheme.
Bradford, who pleaded guilty to conspiracy to commit wire fraud, was sentenced to four years and three months behind bars, to be followed by three years of supervised release, and was ordered to pay $4,297,878.16 in restitution to victims.
Edwards, who pleaded guilty to laundering proceeds of the scheme, was sentenced to two years in prison, to be followed by three years of supervised release, and was ordered to pay $630,000 in restitution to victims.
Hyman Cotter PC routinely represents investors nationwide who were harmed when financial professionals and their firms breached their fiduciary and other duties. Our team includes lawyers who have worked for large financial institutions, including Morgan Stanley and UBS Financial Services, and regulatory bodies such as the SEC. We have a depth of experience resolving cases through various means, including arbitration and litigation when necessary. If you were the victim of a breach of fiduciary or other duties owed to you by a financial professional or financial firm, contact Hyman Cotter at (833) 665-0784 or through our online contact form for a no-cost evaluation of your matter.
