The Securities and Trade Fee (SEC) has filed a grievance in opposition to 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 non-public jet.
Drive Planning allegedly bought unregistered securities to buyers, promising they may earn a ten% return in simply three months. These returns had been imagined to be generated by offering bridge loans to or coming into into joint ventures with actual property builders.
Surprisingly, the web site for this scheme didn’t simply promise unbelievable monetary returns; it truly promised “to information you in direction of being Relationally Wealthy, Bodily Match and Financially Free.”
In complete, buyers invested greater than $372 million within the scheme, and it at present owes $287 million to buyers.
Sadly for them, nonetheless, Drive Planning didn’t have a approach to truly ship these returns, as a substitute allegedly paying them utilizing funds raised from new buyers, typically encouraging present buyers to ‘rollover’ their funds as a substitute of withdrawing.
The SEC claims it was essential to file this grievance 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 buyers, he however paid gross sales commissions to Drive Planning gross sales brokers on June 21.”
Moreover, Burkhalter is going by a divorce and “has lately 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.
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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 sweetness remedies,” together with spending at Diamonds Direct and Louis Vuitton
- $4.6 million on personal jets and luxurious automotive companies
- $183k on inns 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 non-public jet firm”
The SEC expenses fraud in violation of the Securities Act and the Trade Act and is searching for 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 telephone and e mail, however we didn’t obtain a response by time of publication.