Todd Burkhalter the CEO of Georgia-based financial advisory group Drive Planning LLC was sentenced on August 14th to 20 years in prison by U.S. District Court Judge Tiffany Johnson on charges related to his orchestrating the largest Ponzi scheme in Georgia history through which he scammed more than 2,000 investors out of approximately $380 million. Judge Johnson rejected the U.S. Attorney’s plea-bargained recommendation of a 17 ½ year prison sentence. The 20-year sentence was the maximum sentence that Judge Johnson could have imposed and with parole effectively abolished for federal criminal offenses pursuant to the Sentencing and Reform Act since 1987, Burkhalter will be required to serve the bulk of his sentence with only a limited number of “good conduct” credits to reduce the actual time to be served. Burkhalter was also ordered to serve three years of supervised release following the completion of his prison sentence as well as pay $233.7 million in restitution.
Explaining her refusal to accept the government’s recommendation and instead imposing the maximum sentence allowed, Judge Johnson characterized Burkhalter’s conduct as “despicable” and emphasized the extraordinary harm described in the many victims’ impact statements, stressing that many of the victims of Burkhalter’s Ponzi scheme were unlikely ever to fully recover their devastating losses.
Earlier in the week Judge Johnson sentenced two other Drive Planning employees, Chief Operating Officer David Bradford and Chief Administrative Officer Julie Edwards. At his sentencing, Bradford, a church pastor told the court, “I was a coward. I participated in that fraud and benefited from it, and there’s no excuse for what I did. I deceived myself and in turn, I deceived the people who trusted me.”
In sentencing Bradford to a four-year three-month prison term, Judge Johnson recognized his remorse but also noted that he had defrauded thousands of people including many he met through his church affiliation. Contributing to his lighter sentence was his cooperation with law enforcement in the investigation of the crimes and his swift guilty plea which led to the later guilty pleas of both Burkhalter and Julie Edwards who received a two-year prison sentence for her lesser role in the Ponzi scheme.
THE PONZI SCHEME
Between September of 2020 and June of 2024 Burkhalter operated two investment programs known as the “Real Estate Acceleration Loan” program (REAL) and the “Cash Out Real Estate Fund (Core Fund). Burkhalter told prospective investors in the REAL program that it offered short-term bridge loans to real estate developers in need of immediate cash to complete existing projects or fund new ones. REAL investors were promised a guaranteed 10% return on investment every three months. Burkhalter told investors that the investments were totally safe and collateralized by real estate, even creating fake “collateral sheets” describing the properties, some of which were entirely fictional.
Burkhalter claimed that the CORE Fund provided 100% passive income from tax liens, guaranteeing investors a 10% return every six months or a 22% return per year for up to three years, falsely claiming that the fund pooled investors’ funds in government protected and fully collateralized investments.
The truth is that it was all an elaborate Ponzi scheme. Burkhalter used investors’ money to pay earlier investors, pay commissions to his marketing agents and fund his luxurious lifestyle that included a $2 million yacht, a luxury condominium in Cabo San Lucas, Mexico, $800,00 on luxury vehicles, $320,000 on clothing, jewelry and beauty treatments, millions on luxury travel including chartering private jets and $80,000 which he used to pay his ex-wife’s lawyers.
Even after the SEC began an initial civil investigation in March of 2024 Burkhalter brazenly continued to operate his Ponzi scheme until June. In August the SEC obtained a temporary restraining order shutting down Drive Planning LLC. The criminal charges for which he has now been sentenced followed thereafter.
HOW COULD INVESTORS HAVE AVOIDED BEING SCAMMED
As with many Ponzi schemes, there were numerous red flags in Burkhalter’s Ponzi scheme including, most notably, unrealistic guaranteed high returns on investments.
In addition, no one should ever invest in anything they do not fully understand nor invest with anyone without doing research on the person offering the investment. FINRA (Financial Industry Regulatory Authority) is a private, non-profit organization that acts as a regulatory watchdog of the investment brokerage business under the oversight of the SEC. It operates a Central Registration Depository that will tell you if a broker you are considering investing with is licensed and if there have been disciplinary procedures against him or her. You can also check with your own state’s securities regulation office for similar information. Many investment advisers will not be required to register with the SEC but are required to register with your individual state securities regulators. You can find your state’s agency by going to the website of the North American Securities Administrators.
Although Burkhalter had previously been a registered investment advisor, he had not been registered with either the SEC or FINRA since 2014, six years prior to when he started his Ponzi scheme.
Having the same person advise an investment and control the investment is a common thread among Ponzi schemers because it enables them to falsify documents to make the investment look profitable. Generally, for additional security it is desirable to have a separate broker-dealer or third-party act as custodian for investments chosen by an investment adviser.
Finally, before investing, especially in unusual investments such as were presented here, it is prudent to have the documentation reviewed by either an independent financial advisor, CPA or securities lawyer. A simple investigation would have found that neither REAL nor the CORE Fund were properly registered investments with the SEC and were being marketed illegally.
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