Additional Coverage:
- Georgia man accused by SEC of perpetrating Ponzi scheme says he takes ‘full responsibility’ for his actions (foxnews.com)
Georgia businessman Edwin Brant Frost IV and his company, First Liberty Building & Loan, LLC, are facing a complaint from the U.S. Securities and Exchange Commission for allegedly operating a Ponzi scheme.
The SEC alleges that Frost and First Liberty raised at least $140 million from approximately 300 investors. These investors were lured with promises of high returns, ranging from 8% to 18% annually, through loan participation agreements and promissory notes.
According to the complaint, by 2021, a staggering 80% of the interest and principal payments to investors were funded not by legitimate business operations, but by money from new investors.
The SEC complaint further details how Frost allegedly misused investor funds, including over $570,000 in political donations, a $20,800 watch purchase, and over $2.4 million in credit card payments for himself and his businesses. News reports indicate Frost is a Republican.
Justin C. Jeffries, Associate Director of Enforcement for the SEC’s Atlanta Regional Office, cautioned potential investors, stating that promises of unusually high returns should serve as a warning sign. He added, “Unfortunately, we’ve seen this movie before — bad actors luring investors with promises of seemingly over-generous returns — and it does not end well.”
Frost, represented by attorney Joshua Mayes of Robbins Alloy Belinfante Littlefield LLC, issued a statement admitting to misleading investors. He accepted full responsibility for his actions and expressed his intention to cooperate with authorities and repay those he harmed. He also apologized for his actions and expressed gratitude for the support of his friends and family.