A Georgia business scammed about 300 investors out of $140 million through a Ponzi scheme, the Securities and Exchange Commission alleges.
The SEC has filed charges against First Liberty Building & Loan, LLC of Newnan, Ga., and owner and founder Edwin Brant Frost IV. The SEC is seeking an asset freeze and other emergency relief.
From 2014 through June 2025, First Liberty and Frost sold retail investors promissory notes and loan participation agreements offering returns of up to 18%, the SEC said in a news release. Investors were told that their funds would be used to make short-term, high-interest bridge loans to businesses and that few of these loans had defaulted. Borrowers would make repayments via Small Business Administration or other commercial loans. But while some investor funds were used to make bridge loans, most defaulted and stopped interest payments, according to the SEC.
In 2021, First Liberty began operating as a Ponzi scheme, using new investor funds to make principal and interest payments to existing investors, according to the complaint. Frost took investor funds for personal use, including over $2.4 million in credit card payments, paying more than $335,000 to a rare coin dealer, and $230,000 for family vacations, authorities allege.
“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 the release. “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 has charged First Liberty and Frost with violating the antifraud provisions of the federal securities laws and includes as relief defendants five entities that Frost controlled.
The SEC sought an asset freeze assets, appointing a receiver over the entities, and granting an accounting and expedited discovery. The defendants have agreed to the requested emergency and permanent relief, with monetary remedies to be determined by the court at a later date.
The SEC also is pursuing permanent injunctions and civil penalties against the defendants, a conduct-based injunction against Frost, and disgorgement of ill-gotten gains with prejudgment interest against the defendants and relief defendants.
