SEC Charges Real Estate Execs With $372M Ponzi Scheme
The Securities and Exchange Commission has charged the senior leadership team of a financial planning company based in Alpharetta, Georgia, for carrying out a four-year Ponzi scheme that defrauded investors out of hundreds of millions of dollars.
Drive Planning’s former chief operating officer, David Bradford, and former Indiana branch head, Gerardo Linarducci, received civil charges Dec. 19 from the U.S. Attorney's Office in the Northern District of Georgia. Founder and CEO Russell Todd Burkhalter has been named in connection. The SEC is seeking permanent injunctions, civil penalties and disgorgement with prejudgement interest, which means the accused would have to pay back the money plus interest.
Drive Planning’s Real Estate Acceleration Loans, or REAL, program raised over $372M from more than 2,000 nationwide investors from September 2020 to May 2024. Roughly $155M was repaid to investors during that time.
REAL was described as a "bridge loan opportunity” that promised a 10% return every six months. Investors were told collateral secured the investment and their money was being used to enter joint ventures or create loans for developers.
But the loans were reportedly never collateralized. The collateral shown to investors was allegedly a list of properties not owned by Drive Planning but by Bradford, Linarducci and Burkhalter and his wife.
Funds from investors were used to pay earlier investors and make commission payments to the sales teams, the SEC states.
Linarducci, Burkhalter and Bradford also allegedly used the money to purchase homes and designer clothing. Burkhalter allegedly used $4.6M to charter private jets and book luxury transportation services and spent $2M on a yacht and $300K on clothing and jewelry.
Linarducci and his sales team ultimately raised $43M. He was compensated $7.5M in total. Drive Planning also bought Linarducci a $2M house in Fishers, Indiana.
Bradford was compensated $26M and, along with his team, raised a total of $135M. Drive Planning loaned $2M to Bradford for the purchase of a St. Petersburg home and $2M for a new condo in Mexico.
Bradford pleaded guilty last month to conspiracy to commit wire fraud in connection to the Ponzi scheme. Sentencing for the charge is set for March 17.
Drive Planning was brought under investigation in March 2024 as the trio continued to solicit money from the fund. By August of that year, the SEC issued a temporary restraining order, injunction and asset freeze against the company and Burkhalter.
The FBI is working with the SEC to carry out the investigation.
