$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
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