Commission Seeks Immediate Relief in $300 Million Fraud Action
Offering frauds are among the most common type of actions brought by the Commission’s enforcement division. The types of schemes created to lure investors into parting with their hard-earned money in exchange for some form of security are virtually endless.
What also varies significantly is the amount of money raised by the scheme. Some schemes are only able to create a small amount of interest among investors yielding little cash. Others raise millions of dollars. At the same time, few are able to raise the kind of investor interest and cash as the Commission’s most recent case in this area. At the time the complaint was filed the case was on-going and raising millions despite a promise from those behind it to stop. SEC v. Drive Planning, LLC. Civil Action No. 1:24-cv-03583 (N.D. Ga. Filed August 13, 2024).
Named as defendants are: Russell T. Burkhalter and Drive Planning, LLC. Mr. Burkhalter at one time held a Series 65 securities license and is a Georgia resident insurance agent. He is also the founder, owner and alter ego of Drive Planning. The company was organized in 2015 as a limited liability firm under the laws of the state of Georgia.
Beginning in 2020, and continuing through at least June 2024, Defendant Bukhalter aggressively marketed and sold interests in Drive Planning called Real Estate Acceleration Loans or REAL. The interests were described in promotional materials as a bridge loan promising to pay a return of 10% in three months. Potential investors were told by Defendants that trained sales agents would pool their funds and loan them to property developers who would use the money to enter into joint ventures that would raise the funds necessary to pay the promised returns to REAL investors. By the end of June 2024 over 2,000 investors had purchased the interests being marketed by Defendants. Over $300,000,000 had been raised from investors.
Drive Planning did not, however, have any legitimate way to raise the funds required to pay the promised 10% three month returns, according to the complaint. To the contrary, the payments actually made to investors were the product of classic Ponzi scheme fraud – portions of the investor money was used to make the payments labeled as “returns.”
Defendant Burkhalter pledged to halt the operation and the work of the sales agent on June 21, 2024. There was no halt. Defendant Burkhalter is the signatory on bank accounts which are alleged to contain millions of dollars of investor funds. These facts, alleged to constitute violations of each subsection of Securities Act Section 17(a) and Exchange Act Sections 10(b) and 20(a), require immediate relief temporary relief in the form of an asset freeze and appointment of a receiver, the Commission told the court. The investigation continues as the court considers the requests for immediate temporary relief. See Lit. Rel. No. 26076 (August 14, 2024).