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How an alleged Ponzi scheme targeting Republicans left investors and politicians reeling
How an alleged Ponzi scheme targeting Republicans left investors and politicians reeling

Washington Post

time02-08-2025

  • Business
  • Washington Post

How an alleged Ponzi scheme targeting Republicans left investors and politicians reeling

CEDARTOWN, Ga. — A federal receiver is on the hunt to recover $140 million lost in an alleged Ponzi scheme that benefited some Republicans in the top ranks of their party in Georgia and Alabama. He's looking to claw back funds, including almost 1,000 political donations totaling more than $1 million, that often backed far-right Republican insurgents. Some of these same politicians say they too lost money, but others left holding the bag for First Liberty Building & Loan are rank-and-file conservatives, swayed by talk show pundits who promoted it as an opportunity for Christians and 'America First MAGA patriots.' 'I worked my whole life to build up savings and have a little bit of retirement so I could just live comfortably,' said Michael Tinney, a 59-year-old real estate broker from Cedartown, Georgia. Tinney said he deposited $600,000 after hearing First Liberty pitched on shows hosted by conservatives including Erick Erickson, Hugh Hewitt and Charlie Kirk. First Liberty had promised returns up to 16% by making high-interest loans to businesses. Brant Frost IV, an evangelical powerbroker, touted 'Wall Street returns for Main Street investors.' But he skimmed $17 million for himself, his relatives and their affiliated companies, and loaned millions more that borrowers never repaid, a U.S. Securities and Exchange Commission lawsuit claims. 'We've got retired teachers, we've got retired businessmen, we've got retired ministers who have been part of this program as well as doctors, lawyers, everyone else you can imagine,' his son, Brant Frost V, said in 2024 . Tinney said the younger Frost drove to his office to secure his investment. According to a July 21 report from court-appointed receiver S. Gregory Hays, assets now include just $1.2 million in cash along with some Frost family real estate. Hays told The Associated Press it's too early to estimate how much money is recoverable, but he's moving to foreclose on collateral pledged by borrowers who defaulted, including a failed South Carolina factory. Hays also seized and plans to auction Brant Frost IV's Aston Martin sports car. A social media post celebrating that 2022 purchase is particularly scorned by angry investors. But Hays doubts he can get everything back. 'The investors are going to have substantial losses here,' he said. Georgia and Alabama also are investigating. Georgia Secretary of State Brad Raffensperger urged politicians to return campaign cash. Hays said he's already received $110,000, plus a returned $20,000 charitable donation. Frost said on July 11 that he takes 'full responsibility' and would 'spend the rest of my life trying to repay as much as I can to the many people I misled and let down.' But no criminal charges have been announced, and some Frost relatives retain influential positions in the Georgia Republican Party, whose chairman, Josh McKoon , has had the Frosts' political and financial support. McKoon said the party returned nearly $37,000 in Frost donations and he's 'profoundly saddened that members of our conservative movement' lost money. Campaign disclosures show First Liberty, the Frosts and associated companies contributed widely to Republican causes, including more than $700,000 in Georgia, $150,000 in Alabama and nearly $140,000 in Maine, where the Frosts spent $230,000 over multiple years renting a Kennebunkport vacation home. Georgia donations included $1,000 to former party chairman David Shafer's unsuccessful 2018 lieutenant governor campaign, and tens of thousands to the state party. Shafer pushed efforts to overturn President Donald Trump's 2020 defeat in Georgia — leading to an indictment — now stalled on pretrial appeal — against Shafer, Trump and others. A company run by Shafer — Springwood Capital — says in a July 10 lawsuit that it lost $200,000 invested in First Liberty. Its attorney, Brent Herrin, said the company is 'one of hundreds of defrauded investors.' Herrin declined to confirm Shafer owns the company, but financial disclosures show Shafer in 2017 owned at least part of Springwood Capital's parent company. McKoon, who received $4,500 in Frost donations, handled Springwood Capital's incorporation papers . McKoon said he didn't lose any money. Salleigh Grubbs, Georgia GOP first vice-chairman, said on a July 16 radio show that 'a lot of Republican members ... were heavily invested.' In Alabama, Republican state Auditor Andrew Sorrell says he and a political action committee he controls both lost money. He hasn't said how much he lost personally, but records show Alabama Christian Citizens PAC invested $29,000. 'The company had marketed itself through conservative channels as a 'patriotic' and 'Christian' investment opportunity,' Sorrell said, adding he learned a 'tough lesson.' But Sorrell, now running for Alabama Secretary of State, also benefited: He pocketed $55,000 for his campaigns, while Alabama Christian Citizens and Sorrell's federal-level U.S. Christian Citizens PAC each got $12,500. Erickson, an Atlanta-based syndicated radio host, once steered listeners to the Frosts. 'They're active in conservative politics ... good Christian family. I have known them for years. They are wonderful people,' he said in 2020. 'This is how we grow, this is how we fund our movement, and this is how we help out America First MAGA patriots,' radio host John Fredericks said during a June 2024 interview with Brant Frost V. Tinney said the hosts made First Liberty sound 'pretty credible.' Now he calls their warm endorsements a 'recipe for disaster,' and is still waiting for apologies. Fredericks did call the SEC complaint 'disturbing' and 'damning' during a July 16 show. 'I have talked to them many times, never had an inkling that any of that was going on,' Fredericks said, adding: 'They have to have their day to fight the charges.' Brant Frost V, accused Wednesday in a Georgia Ethics Commission complaint of illegally influencing elections , resigned from the state Republican committee Thursday and is resigning as Coweta County GOP chairman, McKoon said. Krista Frost, Brant Frost IV's wife, remains on the state committee and Brant Frost V's sister, Katie Frost, remains 3rd Congressional District GOP chair. McKoon and some allies won party elections in June after a nominating committee led by Katie Frost endorsed them. McKoon's vanquished rival, David Cross, is contesting those results to the Republican National Committee, saying McKoon and the Frosts engaged in skullduggery. Cross, a financial adviser, says he first reported First Liberty's possible misdeeds to state authorities in 2024. Georgia Republican National Committeewoman Amy Kremer, whose daughter was among those defeated, demanded the Frosts' ouster. 'We cannot claim to be the party of law and order while turning a blind eye to financial crimes committed under the banner of Republican leadership,' Kremer said . For his part, Tinney has something else in mind: 'My goal is justice at this point.'

How an alleged Ponzi scheme targeting Republicans left investors and politicians reeling
How an alleged Ponzi scheme targeting Republicans left investors and politicians reeling

Associated Press

time02-08-2025

  • Business
  • Associated Press

How an alleged Ponzi scheme targeting Republicans left investors and politicians reeling

CEDARTOWN, Ga. (AP) — A federal receiver is on the hunt to recover $140 million lost in an alleged Ponzi scheme that benefited some Republicans in the top ranks of their party in Georgia and Alabama. He's looking to claw back funds, including almost 1,000 political donations totaling more than $1 million, that often backed far-right Republican insurgents. Some of these same politicians say they too lost money, but others left holding the bag for First Liberty Building & Loan are rank-and-file conservatives, swayed by talk show pundits who promoted it as an opportunity for Christians and 'America First MAGA patriots.' 'I worked my whole life to build up savings and have a little bit of retirement so I could just live comfortably,' said Michael Tinney, a 59-year-old real estate broker from Cedartown, Georgia. Tinney said he deposited $600,000 after hearing First Liberty pitched on shows hosted by conservatives including Erick Erickson, Hugh Hewitt and Charlie Kirk. First Liberty had promised returns up to 16% by making high-interest loans to businesses. Brant Frost IV, an evangelical powerbroker, touted 'Wall Street returns for Main Street investors.' But he skimmed $17 million for himself, his relatives and their affiliated companies, and loaned millions more that borrowers never repaid, a U.S. Securities and Exchange Commission lawsuit claims. 'We've got retired teachers, we've got retired businessmen, we've got retired ministers who have been part of this program as well as doctors, lawyers, everyone else you can imagine,' his son, Brant Frost V, said in 2024. Tinney said the younger Frost drove to his office to secure his investment. 'Substantial losses' to the investors According to a July 21 report from court-appointed receiver S. Gregory Hays, assets now include just $1.2 million in cash along with some Frost family real estate. Hays told The Associated Press it's too early to estimate how much money is recoverable, but he's moving to foreclose on collateral pledged by borrowers who defaulted, including a failed South Carolina factory. Hays also seized and plans to auction Brant Frost IV's Aston Martin sports car. A social media post celebrating that 2022 purchase is particularly scorned by angry investors. But Hays doubts he can get everything back. 'The investors are going to have substantial losses here,' he said. Georgia and Alabama also are investigating. Georgia Secretary of State Brad Raffensperger urged politicians to return campaign cash. Hays said he's already received $110,000, plus a returned $20,000 charitable donation. Frost said on July 11 that he takes 'full responsibility' and would 'spend the rest of my life trying to repay as much as I can to the many people I misled and let down.' But no criminal charges have been announced, and some Frost relatives retain influential positions in the Georgia Republican Party, whose chairman, Josh McKoon, has had the Frosts' political and financial support. McKoon said the party returned nearly $37,000 in Frost donations and he's 'profoundly saddened that members of our conservative movement' lost money. Some of the money flowed both ways Campaign disclosures show First Liberty, the Frosts and associated companies contributed widely to Republican causes, including more than $700,000 in Georgia, $150,000 in Alabama and nearly $140,000 in Maine, where the Frosts spent $230,000 over multiple years renting a Kennebunkport vacation home. Georgia donations included $1,000 to former party chairman David Shafer's unsuccessful 2018 lieutenant governor campaign, and tens of thousands to the state party. Shafer pushed efforts to overturn President Donald Trump's 2020 defeat in Georgia — leading to an indictment — now stalled on pretrial appeal — against Shafer, Trump and others. A company run by Shafer — Springwood Capital — says in a July 10 lawsuit that it lost $200,000 invested in First Liberty. Its attorney, Brent Herrin, said the company is 'one of hundreds of defrauded investors.' Herrin declined to confirm Shafer owns the company, but financial disclosures show Shafer in 2017 owned at least part of Springwood Capital's parent company. McKoon, who received $4,500 in Frost donations, handled Springwood Capital's incorporation papers. McKoon said he didn't lose any money. Salleigh Grubbs, Georgia GOP first vice-chairman, said on a July 16 radio show that 'a lot of Republican members ... were heavily invested.' In Alabama, Republican state Auditor Andrew Sorrell says he and a political action committee he controls both lost money. He hasn't said how much he lost personally, but records show Alabama Christian Citizens PAC invested $29,000. 'The company had marketed itself through conservative channels as a 'patriotic' and 'Christian' investment opportunity,' Sorrell said, adding he learned a 'tough lesson.' But Sorrell, now running for Alabama Secretary of State, also benefited: He pocketed $55,000 for his campaigns, while Alabama Christian Citizens and Sorrell's federal-level U.S. Christian Citizens PAC each got $12,500. Warm words from pundits Erickson, an Atlanta-based syndicated radio host, once steered listeners to the Frosts. 'They're active in conservative politics ... good Christian family. I have known them for years. They are wonderful people,' he said in 2020. 'This is how we grow, this is how we fund our movement, and this is how we help out America First MAGA patriots,' radio host John Fredericks said during a June 2024 interview with Brant Frost V. Tinney said the hosts made First Liberty sound 'pretty credible.' Now he calls their warm endorsements a 'recipe for disaster,' and is still waiting for apologies. Fredericks did call the SEC complaint 'disturbing' and 'damning' during a July 16 show. 'I have talked to them many times, never had an inkling that any of that was going on,' Fredericks said, adding: 'They have to have their day to fight the charges.' Holding onto power despite the critics Brant Frost V, accused Wednesday in a Georgia Ethics Commission complaint of illegally influencing elections, resigned from the state Republican committee Thursday and is resigning as Coweta County GOP chairman, McKoon said. Krista Frost, Brant Frost IV's wife, remains on the state committee and Brant Frost V's sister, Katie Frost, remains 3rd Congressional District GOP chair. McKoon and some allies won party elections in June after a nominating committee led by Katie Frost endorsed them. McKoon's vanquished rival, David Cross, is contesting those results to the Republican National Committee, saying McKoon and the Frosts engaged in skullduggery. Cross, a financial adviser, says he first reported First Liberty's possible misdeeds to state authorities in 2024. Georgia Republican National Committeewoman Amy Kremer, whose daughter was among those defeated, demanded the Frosts' ouster. 'We cannot claim to be the party of law and order while turning a blind eye to financial crimes committed under the banner of Republican leadership,' Kremer said. For his part, Tinney has something else in mind: 'My goal is justice at this point.'

Georgia firm that called itself part of the ‘patriot economy' abruptly closes — and investors worry their money is gone
Georgia firm that called itself part of the ‘patriot economy' abruptly closes — and investors worry their money is gone

Yahoo

time29-07-2025

  • Business
  • Yahoo

Georgia firm that called itself part of the ‘patriot economy' abruptly closes — and investors worry their money is gone

A lending company in Georgia that marketed itself toward Republicans and faith-based groups has abruptly closed its doors. Don't miss Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 6 of the easiest ways you can catch up (and fast) You don't have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here's how The state has opened an investigation, the federal government has filed charges, and a recent report says investors are worried they won't see their money again. According to WSB-TV, founders Brant Frost IV and Brant Frost V promoted the company as being part of the 'patriot economy' and targeted investors on conservative media. They also shared videos on their YouTube channel. First Liberty Building and Loan posted a notice on its website recently that said it has ceased all business operations, and that interest payments on existing promissory notes, bridge loan participation interests, and other investment programs are indefinitely suspended. The company said it is 'cooperating with federal authorities as part of an effort to accomplish an orderly wind up of the business.' Charges filed by the SEC The Securities and Exchange Commission (SEC) filed charges against Edwin Brant Frost IV on July 10, accusing him of running a Ponzi scheme that cost approximately 300 investors at least $140 million. The SEC said that First Liberty 'offered returns of up to 18%.' 'The complaint also alleges that, while some investor funds were used to make bridge loans, those loans did not perform as represented, and most loans ultimately defaulted and ceased making interest payments,' says the press release. Frost is also accused of misappropriating investor funds for personal use, including $2.4 million in credit card payments, $335,000 to a rare coin dealer, and $230,000 on family vacations. '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,' said Justin C. Jeffries, associate director of enforcement for the SEC's Atlanta Regional Office. 'Unfortunately, we've seen this movie before — bad actors luring investors with promises of seemingly over-generous returns — and it does not end well.' Banks and credit unions are subject to regulations that protect Americans, but First Liberty was a lending firm, not a bank. Bank accounts are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) if a bank fails. If a brokerage firm is a Securities Investor Protection Corporation (SIPC) member, customers are protected in the event of a firm's failure, up to $500,000. Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says — and that 'anyone' can do it How to protect yourself First Liberty Building and Loan was engaged in some red-flag behaviours that investors should watch out for, such as promising unusually high returns. The SEC's 'Red Flags of Investment Fraud Checklist' includes these warning signs: offers that sound 'too good to be true,' promises of great wealth and guaranteed returns, 'risk-free' investment opportunities, unlicensed investment professionals, aggressive sellers who may provide exaggerated or false credentials, 'everyone is buying it' pitches, pressure to invest right now, over-the-top, sensational pitches that may have fake testimonials, unsolicited pitches seeking to obtain your personal information, asking you to pay for investments by credit card, gift card, or wiring money abroad or to a personal account. The best way to avoid fraud is to thoroughly research an investment and the investment professional you're working with. The SEC outlines important questions you should ask before investing. First, check if the seller is licensed. If you're working with a broker, you can check their background and qualifications on the Financial Industry Regulatory Authority's (FINRA) BrokerCheck website. Check the Investment Adviser Public Disclosure website if you are working with an investment adviser firm, and use the SEC Action Lookup website to check for actions against individuals. If you have questions, you can call the SEC's investor assistance line at (800) 732-0330. Second, research the investment and whether it is registered. Offers or sales of securities must either be registered with the SEC or exempt from registration. Check if an investment is registered using the SEC's EDGAR database, or call the SEC's investor assistance line. Third, the SEC advises that you ask yourself whether you understand the investment. Investors should carefully read an investment's prospectus or disclosure statement, and be sure they understand how the investment works and how it will make money. Will First Liberty investors get their money back? It remains unclear what will happen to the hundreds of investors in First Liberty Building and Loan. The court has appointed a receiver, who will conduct an investigation and recovery effort. He has created a website to update investors. In a letter to investors, the receiver, S. Gregory Hays, said that it is 'much too early for us to make any estimate about the amount that will be distributed.' He recently told Fox 5, "The records are pretty much in shambles … Some of the reports show loans being paid off even though the principal wasn't repaid." Around $1.2 million in cash assets have been frozen. At least one investment loss attorney is investigating whether registered sales agents sold investments for First Liberty. A post from Wolper Law Firm states that 'registered sales agents worked for FINRA member brokerage firms, which may be held financially responsible for the misconduct of their registered financial professionals.' What to read next Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Accredited investors can now buy into this $22 trillion asset class once reserved for elites – and become the landlord of Walmart, Whole Foods or Kroger without lifting a finger. Here's how Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. 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Prominent Georgia Republican Brant Frost IV apologizes for $140M Ponzi scheme as judge freezes assets
Prominent Georgia Republican Brant Frost IV apologizes for $140M Ponzi scheme as judge freezes assets

New York Post

time12-07-2025

  • Business
  • New York Post

Prominent Georgia Republican Brant Frost IV apologizes for $140M Ponzi scheme as judge freezes assets

A prominent Georgia Republican accused of running a $140 million Ponzi scheme publicly apologized on Friday as a federal judge ordered his assets frozen and appointed a receiver to try to recover cash for investors. Brant Frost IV said in a statement issued through his lawyers that he 'would like to apologize personally to those I have harmed, but I am under restrictions which prevent me from doing so.' 'I take full responsibility for my actions and am resolved to spend the rest of my life trying to repay as much as I can to the many people I misled and let down,' Frost said in the statement. 'I will be cooperating with the receiver and federal authorities and ask that everyone allow the receiver time to sort things out and do his best to repair the damage I created.' 3 Georgia Republican Brant Frost IV, accused of running a $140 million Ponzi scheme, publicly apologized as his assets were frozen. First Liberty Building & Loan / YouTube The U.S. Securities and Exchange Commission said in a civil lawsuit filed Thursday that First Liberty Building and Loan, controlled by Frost, lied to investors about its business of making high-interest loans to companies. Instead, investigators said that its loans mostly went sour and that it then raised more money to repay earlier investors, while Frost skimmed millions for himself and his family. The firm's collapse rocked the religious and political networks that fed cash to the business, based in suburban Newnan, southwest of Atlanta. 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. U.S. District Judge Michael Brown on Friday froze Frost's personal and corporate assets, banned him from the securities business, and ordered him to pay back ill-gotten gains with interest and fines. The SEC requested the order and Frost agreed to it without admitting or denying any factual allegations. 3 The U.S. Securities and Exchange Commission said that First Liberty Building and Loan, controlled by Frost, lied to investors. AP The judge also appointed financial consultant S. Gregory Hays as receiver. He will take control of assets, examine the books and try to claw back money. Everyone else is barred, for now, from suing Frost or First Liberty. The SEC said the business had only $2.67 million in cash as of May 30. With 300 investors out $140 million, that means the average investor put in nearly $500,000. Frost is alleged to have taken $17 million for himself, his family and affiliated companies, spending $573,000 on political donations to Republicans, $160,000 on jewelry, $20,800 on a Patek Philippe watch and $335,000 to buy gold coins. Frost is also accused of spending $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 spent summers. 3 Frost is alleged to have taken $17 million for himself, his family and affiliated companies, spending $573,000 on donations to Republicans, $160,000 on jewelry, $20,800 on a Patek Philippe watch and $335,000 to buy gold coins. Brant Frost / LinkedIn The SEC said in court papers that Frost kept writing checks and soliciting new investors even after he made 'misrepresentations' when investigators first met with Frost on May 15. Court papers included a June 16 email asking investors to put between $100,000 and $500,000 into a loan to First Liberty itself, claiming the company was developing an AI software system to help banks and credit unions complete loan applications quickly. The company went out of business 11 days later on June 27. Federal prosecutors have declined to say whether they will seek criminal charges. Sometimes, both an SEC civil case and a federal criminal case are filed over investment frauds. The business is also being investigated by the Georgia secretary of state for possible violations of securities law. 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 most loans, prosecutors said. First Liberty promised investors equally high rates of return — 8% to 16%. The company advertised heavily to find new investors over the past year, branching out from the original 'family and friends' approach. 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 and former second vice-chair of the state Republican Party. Daughter Katie Frost is the Republican chairman of the 3rd Congressional District, which includes Coweta County and other areas southwest of Atlanta.

Georgia Republican apologizes for $140M Ponzi scheme as judge freezes assets
Georgia Republican apologizes for $140M Ponzi scheme as judge freezes assets

Yahoo

time11-07-2025

  • Business
  • Yahoo

Georgia Republican apologizes for $140M Ponzi scheme as judge freezes assets

ATLANTA (AP) — A prominent Georgia Republican accused of running a $140 million Ponzi scheme publicly apologized on Friday as a federal judge ordered his assets frozen and appointed a receiver to try to recover cash for investors. Brant Frost IV said in a statement issued through his lawyers that he 'would like to apologize personally to those I have harmed, but I am under restrictions which prevent me from doing so.' 'I take full responsibility for my actions and am resolved to spend the rest of my life trying to repay as much as I can to the many people I misled and let down," Frost said in the statement. 'I will be cooperating with the receiver and federal authorities and ask that everyone allow the receiver time to sort things out and do his best to repair the damage I created.' The U.S. Securities and Exchange Commission said in a civil lawsuit filed Thursday that First Liberty Building and Loan, controlled by Frost, lied to investors about its business of making high-interest loans to companies. Instead, investigators said that its loans mostly went sour and that it then raised more money to repay earlier investors, while Frost skimmed millions for himself and his family. The firm's collapse rocked the religious and political networks that fed cash to the business, based in suburban Newnan, southwest of Atlanta. 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. U.S. District Judge Michael Brown on Friday froze Frost's personal and corporate assets, banned him from the securities business, and ordered him to pay back ill-gotten gains with interest and fines. The SEC requested the order and Frost agreed to it without admitting or denying any factual allegations. The judge also appointed financial consultant S. Gregory Hays as receiver. He will take control of assets, examine the books and try to claw back money. Everyone else is barred, for now, from suing Frost or First Liberty. The SEC said the business had only $2.67 million in cash as of May 30. With 300 investors out $140 million, that means the average investor put in nearly $500,000. Frost is alleged to have taken $17 million for himself, his family and affiliated companies, spending $573,000 on political donations to Republicans, $160,000 on jewelry, $20,800 on a Patek Philippe watch and $335,000 to buy gold coins. Frost is also accused of spending $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 spent summers. The SEC said in court papers that Frost kept writing checks and soliciting new investors even after he made 'misrepresentations' when investigators first met with Frost on May 15. Court papers included a June 16 email asking investors to put between $100,000 and $500,000 into a loan to First Liberty itself, claiming the company was developing an AI software system to help banks and credit unions complete loan applications quickly. The company went out of business 11 days later on June 27. Federal prosecutors have declined to say whether they will seek criminal charges. Sometimes, both an SEC civil case and a federal criminal case are filed over investment frauds. The business is also being investigated by the Georgia secretary of state for possible violations of securities law. 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 most loans, prosecutors said. First Liberty promised investors equally high rates of return — 8% to 16%. The company advertised heavily to find new investors over the past year, branching out from the original 'family and friends' approach. 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 and former second vice-chair of the state Republican Party. Daughter Katie Frost is the Republican chairman of the 3rd Congressional District, which includes Coweta County and other areas southwest of Atlanta.

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