The U.S. Securities and Exchange Commission (SEC) says that a Georgia man allegedly defrauded 300 investors in a Ponzi scheme after his loan business fell apart.
In a new press release, the SEC is accusing Edwin Brant Frost IV and his business, First Liberty Building & Loan, of running a Ponzi scheme by misappropriating funds and misleading investors.
According to authorities, between 2014 and June 2025, the firm operated by offering investors promissory notes and loan participation agreements with returns of up to 18% for short-term loans to businesses at high interest rates that rarely defaulted. Frost and his company allegedly assured investors that the defaulted loans would be repaid by borrowers using funds from the Small Business Administration or other commercial lenders.
But since 2021, Frost allegedly ran First Liberty Building & Loan as a Ponzi scheme after most loans defaulted. The SEC accuses Frost of using new investor capital to make principal and interest payments to existing investors.
The complaint also alleges that Frost misappropriated the funds for personal use, such as purchasing rare coins, paying off personal debt and going on vacations. The SEC accuses Frost and First Liberty Building & Loan of defrauding 300 investors to the tune of $140 million.
Says Justin C. Jeffries, Associate Director of Enforcement for the SEC’s Atlanta Regional Office,
“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. Unfortunately, we’ve seen this movie before – bad actors luring investors with promises of seemingly over-generous returns– and it does not end well.”
In a statement to Fox News, Frost admits his involvement and wrongdoing in the scheme and says he will cooperate with investigators.
“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. 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.”
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