The founder of a Georgia-based financial advisory firm was sentenced to 20 years in federal prison for orchestrating a $380 million Ponzi scheme that authorities said defrauded over 2,000 investors.
Russell Todd Burkhalter, 55, the founder and CEO of Drive Planning LLC, received the maximum prison sentence permitted by law, according to the United States Attorney’s Office for the Northern District of Georgia.
He was also sentenced to three years of supervised release and forced to pay reparations totaling more than $233.7 million.
According to federal authorities, Burkhalter ran the scheme for years using financial products sold by Drive Planning, such as the “Real Estate Acceleration Loan,” or REAL, and the “Cash Out Real Estate Fund,” or CORE Fund.
Drive Planning advertised REAL as a bridge-loan investment that promised investors a 10% return every three months. According to authorities, investors were informed their money would be used to provide short-term financing to real estate developers and that the investments were fully collateralized by real estate.
However, federal authorities stated that some of the properties cited as collateral did not exist, and the valuations on so-called “collateral sheets” were faked.
Prosecutors stated that none of the money invested in REAL was utilized to fund bridge loans or joint ventures with real estate developers. Instead, investment funds were utilized to refund previous investors, compensate Drive Planning agents, and cover personal expenditures.
Hertzberg stated that investors were pushed to withdraw cash from retirement accounts and education funds and, in some cases, borrow money at exorbitant interest rates to invest.
According to federal investigators, the conspiracy began in 2020. After Drive Planning received its initial $50,000 REAL investment, prosecutors allege that at least $21,000 was utilized to repay an earlier investor. Within the first several months, at least $80,000 in investor funds were reportedly diverted to pay Burkhalter’s ex-wife’s attorneys and recreational vehicle-related bills.
Burkhalter and Drive Planning continued to seek investments even after the Securities and Exchange Commission began examining the company in March 2024, according to prosecutors. Authorities say tens of millions of dollars more were solicited before the SEC issued a temporary restraining order against Drive Planning in August 2024.
A court-appointed receiver is seeking to recover funds and liquidate assets in order to recompense victims.
Two other former Drive Planning officials were sentenced this week.
David Bradford, 53, of Peachtree Corners, the company’s former chief operating officer, was sentenced to four years and three months in jail after pleading guilty to conspiracy to conduct wire fraud involving the CORE Fund. He was forced to pay almost $4.2 million in restitution.
Julie Edwards, 59, of Cumming, Drive Planning’s former chief administrative officer, received a two-year federal prison sentence after pleading guilty to laundering funds from the fraud. She was forced to pay $630,000 in restitution.
The sentences will be served without any possibility of parole.
The FBI investigated the case, with assistance from the Securities and Exchange Commission.
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