Federal prosecutors in Georgia say the recruiting pitch behind Drive Planning was built around a single number: a promised 10 percent return every three months. To move money in the door, the government says the company steered investors toward funds that were supposed to stay untouched — retirement accounts built over decades, children’s college savings, and cash borrowed at high interest rates. The cost of following that advice, separate from whatever Drive Planning ultimately paid back, fell hardest on savers who could least afford to lose years of compounding growth.
A 10 Percent Return Every Three Months, Sold as a Bridge Loan
According to the U.S. Attorney’s Office for the Northern District of Georgia, Drive Planning LLC and its founder, Todd Burkhalter, marketed an investment called REAL — Real Estate Acquisition Loans — as a bridge-loan opportunity that would “guarantee” investors a 10 percent return every three months. Prosecutors say the company also ran a companion vehicle called the CORE Fund and told prospective investors they did not need to be accredited to participate, a detail that widened the pool of people it could solicit well beyond the wealthier investors normally required for a private, unregistered offering. Bridge loans in real estate typically finance short-term acquisition or renovation costs and carry variable, market-tied yields, nothing like a fixed guarantee an investor could set a clock by regardless of what real estate markets were doing. A guaranteed 10 percent every three months compounds to roughly 46 percent a year, a return no legitimate real estate lending business has produced consistently. Investigators say that gap between the promise and any real-world lending return is what funded payouts to earlier investors as new money kept arriving, the defining mechanic of a Ponzi scheme. By the time it collapsed, prosecutors say thousands of investors had put money into REAL and the CORE Fund, many believing the fixed, guaranteed figure made the investment safer than the stock market rather than far riskier.
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The Retirement Account Math Prosecutors Say Victims Were Never Told
Court filings describe sales representatives encouraging investors to take early distributions from retirement accounts to help fund their purchase into REAL. For most savers, that instruction carries an immediate cost that has nothing to do with whether the underlying investment ever pays off. A distribution taken from a traditional IRA before age 59½ triggers a 10 percent additional tax on top of ordinary income tax, unless a specific exception applies, according to the Internal Revenue Service. A retiree in a 22 percent federal bracket who pulls $100,000 out early can lose roughly $32,000 to combined taxes and penalties before a single dollar ever reaches an investment, money that also stops compounding tax-deferred for whatever years remained before retirement. Depending on the state, a separate state income tax bill can land on top of that federal hit, shrinking what is left before it ever reaches a fund like REAL. That tax bill is owed to the IRS regardless of whether Drive Planning, or any restitution process tied to the case, ever returns a dime of what was invested; a criminal restitution order addresses what the scheme took, not the separate tax cost of how the money was raised in the first place.
Draining College Funds for a Return That Was Never Coming
The government’s description of the pitch goes beyond retirement savings. Prosecutors say victims were “encouraged to deplete their kids’ college funds” alongside the early retirement withdrawals and high-interest borrowing, according to the same Justice Department release. Money pulled from a 529 plan or a custodial account for anything other than qualified education expenses can carry its own tax consequences on the earnings portion, on top of forfeiting years of tax-advantaged growth that a family cannot simply redeposit later at the same pace. A college fund also runs on a fixed deadline that retirement savings do not always share — a household can sometimes delay retirement by a few years to rebuild what was lost, but a tuition bill arrives on the academic calendar whether or not the investment behind it ever paid off.
The Red Flags Investor.gov Lists for Exactly This Pitch
The Securities and Exchange Commission’s investor-education site describes the pattern almost point for point. A Ponzi scheme, the agency notes, typically offers “high returns with little or no risk” and “overly consistent returns” that keep paying out “regardless of overall market conditions,” while involving investments that are not registered with the SEC or state regulators and are sold by unlicensed individuals or unregistered firms, according to Investor.gov. The same checklist flags accounts that become difficult to cash out, a position thousands of Drive Planning investors reportedly found themselves in once withdrawals slowed. Burkhalter, the company’s founder, has since been sentenced to federal prison in the case, but the solicitation tactics prosecutors described carry the more durable lesson for any older investor weighing a similarly guaranteed pitch: a fixed, unwavering, above-market return is the detail to check before any retirement account or college fund gets touched. Investor.gov’s own checklist is free to read and does not require spending down either one to find out.
This article was produced with the assistance of AI and reviewed by The Financial Wire editorial team.
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Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
