The Sales Team Behind a $300M Drive Planning Ponzi Scheme

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In today’s Follow Up:

• $300M Ponzi scheme sales team 👀 

• Don’t ‘be honest’ 🤝 

• Called a ‘noob’ on a cold call 📞 

• Sales jobs, LinkedIn & a meme 😂

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The Sales Team Behind a $300M Ponzi Scheme

We love a movie-worthy sales fraud story, and today’s story has all the makings for the next Netflix docuseries.

A recent SEC filing is accusing Drive Planning, and its Founder & CEO, Russell Todd Burkhalter, of running a $300M Ponzi scheme starting in 2020.

The details…

An estimated $300M was raised from over 2,000 investors who were pitched a real estate investment opportunity that allegedly returned 10% in just 3 months.

As most Ponzi schemes work, investors put in a small amount, get a good return (from new investor money), and then invest more. That cycle continues until it all crashes.

The company’s marketing material shows that the company called the investment a ‘Real Estate Acceleration Loan’ (REAL), which acted as a short-term loan to developers with a proven track record.

A word of advice… if the investment is described as “Basically, it’s a…”, you should probably run.

The Sales Team…

To run this operation, Drive Planning had a 100 person sales team, and gave sales reps the title of ‘Financial Consultant’.

These sales reps, ahem, I mean… Financial Consultants*, were paid a 4% commission on new funds they brought in, as well as 4% on the funds that their investors rolled into the new investments.

According to an SEC document, “For one recent two-week period, Drive Planning paid sales commissions of $1.92mn.” Wowzers…

If you assumed that commission was paid evenly across the 100 reps, every 2-week cycle, each rep would make nearly $10K/week, or $500K/year… This sounds like a job at Stratton Oakmont in its prime.

By May 2024, Drive Planning was bringing in ~$1M/day in new funding applications (that’s a whole lotta commission). Which makes sense, because the sales reps had a great pitch… The investment offered a 10% return in 3 months. Who wouldn’t love that? 

And of course, once the investors got a taste of the initial returns, they’d usually roll into the next fund.

But you can’t forget about the objections… When you ask people to invest money, a lack of funds becomes an objection.

So, to overcome that objection, the SEC says reps would encourage investors to tap into savings, IRAs, and even pull from lines of credit to get in on the investment opportunity.

Objection = overcome.

Where’d the money go?

The CEO was living a lavish life during all of this.

According to SEC allegations, Burkhalter used investor funds to buy a:

• $3.1M yacht.

• $2M luxury condo.

• And $4.6M worth of private jet charters.

But he didn’t forget to give back to others…

The CEO’s LinkedIn states he spent time at North Georgia College and State University where he: ‘volunteered his time to educate some of North Georgia College and State University future Sales Professionals. The Senior level sales class enjoyed the wit, humor and real world experience that Todd brought to the subject of selling as a career.’ 

At least he wasn’t teaching a class about ethics…

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Sales Around The Web 🗞️

💰️ The B2B sales SaaS startup Trumpet, shares the pitch deck they used to raise $6.35 million.

📞 Morgan Ingram’s guide to cold calling and increasing your success rate.

👀 The top 6 mistakes to avoid when doing cold outreach.

🧠 Jason Lemkin’s top 3 pieces of advice for a first time VP of Sales.

😂 A prospect called this sales rep a ‘noob’ on his cold call, and now he’s not sure what to think.

Checking In On LinkedIn

He won an Olympic Gold Medal, and is now in the running for the best LinkedIn post of the year…. Legend. 😂 🥇 

Sales Meme of the Day