BREAKING: Investors Lose Big On Madoff Style Ponzi Scheme...

Well folks as the market continues to milk more gains as the Nasdaq is up +0.63% on the day, here’s a nice conversation starter for you going into this weekend: Scumbag of the year, Todd Burkhalter, officially got his Bernie Madoff on as he swindled his loyal investors in a whopping $300 million Ponzi scheme. 

(Source: Fox News) 

In short, throughout his tenure as the CEO of Drive Planning, Burkhalter’s main edge as an investment advisor was selling the golden ticket of a “bridge loan opportunity” that promised  10% returns every three months. Now of course, while that sounds about as shady as a Collateralized Debt Obligation (aka the bomb that exploded the global markets in 2008), this still had Burkhalter convincing over 2,000 investors chomping at the bit with more than $300 million to invest into this income driven investment. Hell, even my Nigerian prince pen pal asking for bitcoin sounded more stable than this. 

(Source: Giphy) 

However, while investors dreamed of exotic cars and private islands, Todd was busy making those dreams his reality—literally. Instead of actually using that money to leverage the so-called “too good to be true” bridge loan, the guy legit took that money and not only snagged a $3 million yacht, but he also splurged $4.6 million on private jets, and luxury cars that would make Jay Leno harder than a lava rock. 

(Source: Giphy) 

Additionally, Burkhalter bought up a luxury condo in Cabo, a ranch in Georgia, and even a clothing store. I mean, I guess when your job is to bamboozle people, you might as well dress the part, amirite? See: Tell me you suck at your job without telling me you suck at your job. 

(Source: Financial Times) 

But as all Ponzi schemes go, no matter how carefully orchestrated and sophisticated, investors finally got the hint that the promise of 10% returns was about as full of air as Jim Cramer's stock picks. Complaints eventually surfaced resulting in the SEC entering the chat where they, zero percent surprisingly, found that Burkhalter had been selling unregistered securities under the guise of real estate investments - where instead of funding land development projects, he was using new investor money to pay off older ones. 

(Source: SEC) 

So yeah, apparently using new investor money to pay returns to old investors isn’t a sustainable business model. Who knew? 

(Source: Memeroid) 

Again, as this all just came to a head, like yesterday, this just proves to all of us investors that when it comes to greed and Wall Street (or investment advisors in general), trust is a rare commodity. The SEC’s Nekia Hackworth Jones put it the best way possible: “Burkhalter gained the trust of everyday people and encouraged them to invest in this scheme by promising exorbitant returns.” aka Classic Ponzi Scheme. 

(Source: Giphy) 

So while this doesn’t really mean anything to you savvy investors reading this, this is just a stark reminder to not be dumb with your investments. Seriously, if something smells like BS, looks like BS, and sounds like BS, it's probably not a revolutionary new fertilizer company - it's just plain old BS.

With that said, while Burkhalter is finally facing the music as his victims try to recover their losses, always be on your guard, friends - especially considering the only free cheese these days is in the mousetrap. And while stupid games may sound fun to play, they still only bring stupid prizes at the end. So stay safe and stay frosty this Friday! Until next time…