SEC Charges Georgia-based First Liberty Building & Loan and its Owner for Operating a $140 Million Ponzi Scheme
summary
The SEC filed charges against First Liberty Building & Loan and Edwin Brant Frost IV for operating a Ponzi scheme that defrauded 300 investors of at least $140 million.
paragraph
First Liberty Building & Loan and its founder, Edwin Brant Frost IV, face charges for a Ponzi scheme that defrauded approximately 300 investors of at least $140 million. The defendants allegedly misrepresented high-yield bridge loans to mask the diversion of funds for personal use and to pay existing investors. The SEC is seeking emergency relief, including asset freezes, a receiver, and civil penalties for violating federal securities antifraud provisions.
narrative
The SEC filed charges against Newnan-based First Liberty Building & Loan, LLC and its founder, Edwin Brant Frost IV, for operating a Ponzi scheme from 2014 through June 2025. The scheme defrauded approximately 300 investors of at least $140 million by offering promissory notes with returns up to 18%. While funds were purportedly used for short-term bridge loans, most loans defaulted, and the defendants used new investor capital to pay existing investors. Frost also misappropriated funds for personal expenses, including $2.4 million in credit card payments, $335,000 for rare coins, and $230,000 for family vacations. The SEC is seeking asset freezes, a receiver, and disgorgement of ill-gotten gains in the U.S. District Court for the Northern District of Georgia. The defendants have consented to the requested emergency and permanent relief, with final monetary remedies to be determined by the court.
Classified ponzi(confidence 100%). EDGAR detection: forms Form D· recall 35% / precision 15%. detection rule →
Statutes
15 U.S.C. § 77q(a)15 U.S.C. § 78j(b)
Parties
sec’s requested emergency and permanent reliefSecurities and Exchange Commission
Keywords
investor fundssecponzi schemelibertyrelieffrostinvestorsloansgeorgia-based libertyliberty buildingbuilding loaninvestorfundsmakeloan
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 4
- $140.00M $140 million $100M–$1B
- $2.40M $2.4 million $1M–$10M
- $335K $335,000 $100K–$1M
- $230K $230,000 $100K–$1M
Entities 2
- agency sec’s requested emergency and permanent relief
- agency Securities and Exchange Commission
Triples 7
- Securities And Exchange Commission announced it filed charges against First Liberty Building & Loan, LLC and Edwin Brant Frost IV
- First Liberty And Frost offered and sold promissory notes and loan participation agreements to retail investors
- Frost misappropriated investor funds for personal use
- Frost used investor funds to make over $2.4 million in credit card payments, more than $335,000 to a rare coin dealer, and $230,000 on family vacations
- SEC seeks emergency relief including an order freezing assets, appointing a receiver, and granting an accounting and expedited discovery
- SEC seeks permanent injunctions and civil penalties against the defendants
- Defendants And Relief Defendants consented to SEC’s requested emergency and permanent relief
PDF (from attached: complaint)
Text layers
Extracted body text (3,055c)
The Securities and Exchange Commission today announced that it filed charges seeking an asset freeze and other emergency relief against Newnan, Georgia-based First Liberty Building & Loan, LLC and its founder and owner Edwin Brant Frost IV in connection with a Ponzi scheme that defrauded approximately 300 investors of at least $140 million. According to the SEC’s complaint, from approximately 2014 through June 2025, First Liberty and Frost offered and sold to retail 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 told investors that very few of these loans had defaulted and that they would be repaid by borrowers via Small Business Administration or other commercial loans. 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. 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, according to the complaint. The complaint further alleges that Frost misappropriated investor funds for personal use, including by using investor funds to make over $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’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. The SEC seeks emergency relief, including an order freezing assets, appointing a receiver over the entities, and granting an accounting and expedited discovery. The SEC also seeks 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. Without admitting or denying the allegations in the complaint, the defendants and relief defendants consented to the SEC’s requested emergency and permanent relief, with monetary remedies to be determined by the court at a later date. The SEC's investigation was conducted by Justin Delfino and Tiffany Kunkle and supervised by Peter Diskin and Mr. Jeffries. The litigation is being led by Kristin Murnahan and Graham Loomis.
OCR text (3,055c · html-text · 99% conf)
The Securities and Exchange Commission today announced that it filed charges seeking an asset freeze and other emergency relief against Newnan, Georgia-based First Liberty Building & Loan, LLC and its founder and owner Edwin Brant Frost IV in connection with a Ponzi scheme that defrauded approximately 300 investors of at least $140 million. According to the SEC’s complaint, from approximately 2014 through June 2025, First Liberty and Frost offered and sold to retail 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 told investors that very few of these loans had defaulted and that they would be repaid by borrowers via Small Business Administration or other commercial loans. 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. 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, according to the complaint. The complaint further alleges that Frost misappropriated investor funds for personal use, including by using investor funds to make over $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’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. The SEC seeks emergency relief, including an order freezing assets, appointing a receiver over the entities, and granting an accounting and expedited discovery. The SEC also seeks 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. Without admitting or denying the allegations in the complaint, the defendants and relief defendants consented to the SEC’s requested emergency and permanent relief, with monetary remedies to be determined by the court at a later date. The SEC's investigation was conducted by Justin Delfino and Tiffany Kunkle and supervised by Peter Diskin and Mr. Jeffries. The litigation is being led by Kristin Murnahan and Graham Loomis.