The Securities and Change Fee (SEC) has filed a criticism towards Drive Planning, LLC, and Russell Burkhalter accusing them of working an actual property Ponzi scheme during which funds had been misappropriated to Coinbase, and used to purchase a yacht and a personal jet.
Drive Planning allegedly bought unregistered securities to traders, promising they might earn a ten% return in simply three months. These returns had been speculated to be generated by offering bridge loans to or coming into into joint ventures with actual property builders.
Unusually, the web site for this scheme didn’t simply promise unimaginable monetary returns; it truly promised “to information you in the direction of being Relationally Wealthy, Bodily Match and Financially Free.”
In complete, traders invested greater than $372 million within the scheme, and it presently owes $287 million to traders.
Sadly for them, nonetheless, Drive Planning didn’t have a strategy to truly ship these returns, as an alternative allegedly paying them utilizing funds raised from new traders, typically encouraging present traders to ‘rollover’ their funds as an alternative of withdrawing.
The SEC claims it was essential to file this criticism as a result of Burkhalter had beforehand “pledged, on June 10, 2024, to stop accepting new investments in REAL, and to stop paying commissions or paying supposed returns to traders, he however paid gross sales commissions to Drive Planning gross sales brokers on June 21.”
Moreover, Burkhalter is going by a divorce and “has not too long ago entered right into a divorce settlement pursuant to which he might switch to his partner property purchased with investor funds.”
Stillwater, the yacht allegedly bought with investor funds.
Learn extra: Proprietor of ‘Ponzi-like’ crypto hedge fund ordered to pay again $84M losses
Burkhalter, the founding father of the scheme, has allegedly spent closely from Drive Planning’s coffers, together with:
- $51k on RV-related bills
- $42k for his ex-wife’s lawyer
- $3.1 million for a yacht
- $319k on “clothes, jewellery, and wonder remedies,” together with spending at Diamonds Direct and Louis Vuitton
- $4.6 million on non-public jets and luxurious automotive companies
- $183k on lodges and resorts
- $749k on vehicle bills
- $1.9 million was transferred to Coinbase ($1.2 million was transferred again to the enterprise)
- $2 million for a luxurious rental in Cabo San Lucas
- $1.1 million to “NetJets, a personal jet firm”
The SEC prices fraud in violation of the Securities Act and the Change Act and is in search of a director and officer ban for Burkhalter, a disgorgement of ill-gotten funds, and an order freezing different funds whereas an accounting is performed.
Protos reached out to Drive Planning for touch upon these allegations by cellphone and e mail, however we didn’t obtain a response by time of publication.
