ATLANTA — The Securities and Exchange Commission said Thursday it filed charges seeking an asset freeze and other emergency relief against First Liberty Building & Loan, LLC, and its founder and owner Edwin Brant Frost IV.
The SEC says the Newnan, Georgia-based company is a Ponzi scheme that defrauded about 300 investors of at least $140 million.
Channel 2’s Richard Elliot reported on First Liberty earlier this week. The founders of First Liberty solicited investors on right-wing media and in faith-based communities, calling it part of the “patriot economy.”
Investors in First Liberty said they’re worried that they won’t get their money back after the company’s sudden closure.
The SEC’s complaint, filed in the U.S. District Court for the Northern District of Georgia, charges First Liberty and Frost with violating the antifraud provisions of the federal securities laws and names five entities that Frost controlled as relief defendants.
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The complaint says that since at least 2021, First Liberty operated as a Ponzi scheme by using new investor funds to make principal and interest payments to existing investors.
The SEC claims that from about 2014 through June 2025, First Liberty and Frost offered and sold to investors promissory notes and loan participation agreements that offered returns of up to 18% by representing that investor funds would be used to make short-term bridge loans to businesses at relatively high interest rates.
The defendants allegedly said very few of these loans had defaulted and that borrowers would repay them via Small Business Administration or other commercial loans.
The SEC complaint also says that, while some investor funds were used to make the loans, they did not perform as represented. Most of the loans defaulted.
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Authorities also allege that Frost used investor funds for personal use, including to make more than $2.4 million in credit card payments, paying more than $335,000 to a rare coin dealer and spending $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.”
The SEC said it is seeking emergency relief, including an asset freeze, and a receiver appointed over the entities. They also sought an accounting and expedited discovery.
The SEC also seeks permanent injunctions and civil penalties against the defendants, a conduct-based injunction against Frost, and retrieval of allegedly ill-gotten gains with prejudgment interest against the defendants and relief defendants.
The defendants and relief defendants agreed with the SEC’s demands without admitting or denying the allegations in the complaint. Monetary remedies will be determined by the court at a later date.
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