Federal officials say a prominent Georgia Republican was running a $140
million Ponzi scheme
[July 11, 2025]
By JEFF AMY
NEWNAN, Ga. (AP) — A prominent Georgia Republican was running a Ponzi
scheme that defrauded 300 investors of at least $140 million, federal
officials alleged in a complaint filed Thursday.
The civil lawsuit by the U.S. Securities and Exchange Commission said
First Liberty Building and Loan, controlled by Brant Frost IV, lied to
investors about its business of making high-interest loans to companies.
Instead, investigators said, it raised more money to repay earlier
investors.
Frost is alleged to have taken more than $19 million of investor funds
for himself, his family and affiliated companies even as the business
was going broke, spending $160,000 on jewelry and $335,000 with a rare
coin dealer. Frost is also said to have spent $320,000 to rent a
vacation home over multiple years in Kennebunkport, Maine, the town
where the family of late president George H. W. Bush famously spent
summers.
The SEC said Frost kept writing checks even after the commission began
its investigation
First Liberty said last month that it would stop making loans and paying
interest and principal to investors in those loans. The company said it
was not answering phone calls or emails.
First Liberty has not responded to an email seeking comment, and no one
was present at its office Thursday evening in Newnan, a suburb southwest
of Atlanta. A lawyer who acts as the company's registered agent for
corporate purposes said earlier that he had no information.
The collapse rocked the religious and political networks that the
business drew investors from. It also could have ramifications in state
Republican politics, cutting off funding to the far-right candidates
that Frost and his family have favored. Investigators said Frost spent
$570,000 from investor funds on political contributions.
The SEC said the business had only $2.67 million in cash as of May 30,
although regulators are also seeking to claw back money from Frost and
associated companies. With 300 investors out $140 million, that means
the average investor put in nearly $500,000.
First Liberty said it made loans to companies that needed cash while
they waited for more conventional loans from the U.S. Small Business
Administration. It charged high rates of interest — 18% on some loans,
according to a document obtained by The Associated Press. First Liberty
promised investors equally high rates of return — 16% on the 18% loans.
In recent months the business advertised heavily on conservative radio
shows promising “Wall Street returns for Main Street investors.”
“The promise of a high rate of return on an investment is a red flag
that should make all potential investors think twice or maybe even three
times before investing their money,” Justin C. Jeffries, associate
director of enforcement for the SEC’s Atlanta Regional Office, said in a
statement.
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The office of First Liberty Building and Loan, which federal
officials allege was a Ponzi scheme, is shown on Thursday, July 10,
2025 in Newnan, Ga. (AP Photo/Jeff Amy)
The company has represented that it is “cooperating with federal
authorities as part of an effort to accomplish an orderly wind-up of
the business.” The SEC said Frost and his companies agreed to the
SEC's enforcement actions “with monetary remedies to be determined
by the court at a later date.”
While the SEC says there were loans to companies, as many as 90% of
those companies have defaulted. By 2021 the company was running as a
Ponzi scheme, the complaint said, even as Frost withdrew increasing
amounts of money.
The business is being investigated by the Georgia secretary of state
for possible violations of securities law said Robert Sinners, a
spokesperson for the office.
A 2023 document obtained by the AP is titled as a “promissory note,”
and Sinners said anyone issuing promissory notes is supposed to be
registered with Georgia securities officials.
Sinners encouraged any victims to contact the state Securities
Division.
Federal prosecutors have declined to comment on whether they are
considering criminal charges. Sometimes both an SEC civil case and a
federal criminal case are filed over investment frauds.
Frost has been an important player in Georgia politics since 1988,
when he coordinated televangelist Pat Robertson’s Republican
presidential bid in the state. His son, Brant Frost V, is chairman
of the Coweta County Republican Party, where the company is based,
and is a former second vice-chair of the state Republican Party.
Daughter Katie Frost is Republican chairman of the 3rd Congressional
District, which includes Coweta County and other areas southwest of
Atlanta.
At last month’s state Republican convention, Katie Frost chaired a
nominating committee that recommended delegates reelect state Party
Chairman Josh McKoon. Delegates followed that recommendation,
rejecting a number of insurgent candidates.
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