Republican banker accused in $140 million Ponzi scheme

Authorities declare Frost, 67, particularly focused Republican activists and conservative Christian traders by way of a community of right-wing media retailers. The Georgia monetary agency’s now-defunct web site calls out its commercials “as heard on” conservative media together with Erick Erickson, Hugh Hewitt, and Charlie Kirk’s reveals. First Liberty abruptly shut down late final month posting a be aware to purchasers on its web site stating that its investments, funds, and applications have been “indefinitely suspended.”

“First Liberty is cooperating with federal authorities as a part of an effort to perform an orderly wind-up of the enterprise,” the message states. “First Liberty workers should not approved to make any additional communications right now concerning the continued scenario, and nobody on the firm can be accessible to reply telephone calls or reply to electronic mail inquiries.”

Makes an attempt to succeed in Frost have been unsuccessful. 

Based on the criticism, Frost and First Liberty raised a minimum of $140 million from the sale of mortgage participation agreements and promissory notes to a minimum of 300 traders. The alleged scheme started again in 2014 with Frost elevating capital by way of family and friends. They have been first provided mortgage participation agreements, that are contracts the place traders pool cash collectively to fund a single mortgage with every participant proudly owning a share. They have been later provided promissory notes—mainly IOUs— wherein traders have been lending cash to the corporate itself. Brant allegedly instructed traders the funds can be used to make short-term bridge loans at excessive rates of interest. 

Frost and First Liberty allegedly instructed traders 100% of the proceeds from mortgage agreements and promissory notes can be used to fund bridge loans and that traders can be reap good points from the compensation of the bridge loans and the curiosity paid on them. The family and friends program provided 14% to 18% returns, and the notes an annual return of 8% to 13%. The SEC claims Frost instructed traders orally he didn’t take charges out of the investor funds. 

The SEC’s criticism alleges almost all of those representations have been false. In 2021, First Liberty started working as a Ponzi scheme, the criticism states, with about 80% of the curiosity and funds to traders sourced from new investor funds—the hallmark of a Ponzi scheme. 

“The promise of a excessive price of return on an funding is a crimson flag that ought to make all potential traders assume twice or perhaps even thrice earlier than investing their cash,” mentioned Justin C. Jeffries, Affiliate Director of Enforcement for the SEC’s Atlanta Regional Workplace in a assertion. “Sadly, we’ve seen this film earlier than—dangerous actors luring traders with guarantees of seemingly over-generous returns—and it doesn’t finish properly.”

In 2024, the SEC claims Frost expanded the monetary agency’s attain by providing and promoting the promissory notes to the general public on the radio, the agency’s web site and on podcasts and different applications. The corporate marketed itself as a elementary piece of what it referred to as the “patriot economic system.”

However, in accordance with the SEC, the alleged scheme had already unraveled. First Liberty allegedly operated at a deficit every year from 2021 by way of Might 30, 2025 and as an alternative functioned as a Ponzi operation. The regulator claims Frost even allegedly misled present traders concerning the safety of their present investments to coax extra funding out of them. 

In the course of the alleged scheme, the SEC accused Frost of residing lavishly off traders’ property. 

Frost allegedly spent $230,000 to hire a trip dwelling in Kennebunkport, Maine and $140,000 on jewellery. He additionally allegedly snagged a $20,800 Patek Philippe watch with investor cash and doled out $335,000 to a uncommon coin vendor. He additionally allegedly paid $2.4 million on his bank cards with investor funds and made $570,000 in political donations. 

The SEC alleged that 9 days after fee staffers interviewed Frost, he withdrew $100,000 from firm accounts containing investor funds and wrote $210,875 in checks from firm accounts to a enterprise that focuses on promoting gold cash. The SEC has frozen Frost’s property.

Messages to Erickson, Hewitt, and Kirk weren’t instantly returned. 

In a message on the web site, First Liberty wrote: “First Liberty hopes to supply extra data and updates within the close to future concerning the standing of the corporate’s efforts to effectuate an orderly wind-up of the enterprise.”