Prominent Georgia Republican Implicated in Alleged $140 Million Ponzi Scheme

Newman, GA (BuzzReport)– Federal officials have filed a civil complaint alleging that Brant Frost IV, a prominent Georgia Republican, operated a Ponzi scheme that defrauded approximately 300 investors of at least $140 million. The U.S. Securities and Exchange Commission (SEC) initiated the lawsuit on Thursday, detailing how Frost’s company, First Liberty Building and Loan, allegedly misled investors about its business operations.

According to the SEC’s complaint, First Liberty Building and Loan purported to make high-interest loans to companies. However, investigators assert that the firm primarily raised funds from new investors to repay earlier ones, a hallmark of a Ponzi scheme. The complaint alleges that by 2021, the company was definitively operating in this fraudulent manner.

Brant Frost IV is accused of personally siphoning more than $19 million from investor funds, diverting the money to himself, his family members, and affiliated companies even as First Liberty Building and Loan faced financial collapse. This alleged personal spending included $160,000 on jewelry, $335,000 with a rare coin dealer, and $320,000 for multi-year rentals of a vacation home in Kennebunkport, Maine.

The SEC also noted that Frost is alleged to have spent $570,000 of investor money on political contributions. This revelation could have significant ramifications within state Republican politics, potentially impacting funding for the far-right candidates favored by Frost and his family.

First Liberty Building and Loan ceased making loans and payments to investors last month, and the company has reportedly stopped responding to phone calls or emails. Attempts to reach the company for comment at its Newnan, Georgia, office on Thursday evening were unsuccessful, with no one present.

The collapse of First Liberty has sent shockwaves through the religious and political networks from which the business reportedly drew many of its investors. The SEC’s complaint indicates that as of May 30, the company held only $2.67 million in cash. With $140 million lost by 300 investors, the average individual loss is estimated at nearly $500,000.

First Liberty had previously claimed to provide high-interest loans—up to 18% on some—to companies awaiting more conventional financing, such as U.S. Small Business Administration loans. In turn, the company promised investors equally high returns, reportedly 16% on the 18% loans. The firm heavily advertised on conservative radio shows, pledging “Wall Street returns for Main Street investors.”

Justin C. Jeffries, associate director of enforcement for the SEC’s Atlanta Regional Office, issued a statement cautioning against such promises. “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,” he said.

While First Liberty has stated it is “cooperating with federal authorities as part of an effort to accomplish an orderly wind-up of the business,” and Frost and his companies have agreed to the SEC’s enforcement actions, monetary remedies will be determined by the court at a later date. Despite the company’s claims of making legitimate commercial loans, the SEC alleges that as many as 90% of those companies have defaulted.

Beyond the federal civil complaint, the Georgia Secretary of State’s office is also investigating First Liberty for potential violations of state securities law. Robert Sinners, a spokesperson for the office, noted that the issuance of “promissory notes,” as seen in a 2023 document obtained by the Associated Press, requires registration with state securities officials. Sinners encouraged any victims to contact the state Securities Division.

Federal prosecutors have not yet commented on whether criminal charges are being considered against Frost. Investment fraud cases can sometimes lead to both SEC civil actions and federal criminal prosecutions.

Brant Frost IV has been a significant figure in Georgia politics since 1988, having coordinated televangelist Pat Robertson’s Republican presidential campaign in the state. His family remains deeply embedded in the state’s Republican apparatus: his son, Brant Frost V, chairs the Coweta County Republican Party and is a former second vice-chair of the state Republican Party, while his daughter, Katie Frost, serves as the Republican chairman for the 3rd Congressional District.