The Securities and Exchange Commission said Newnan, Georgia-based First Liberty Building & Loan, LLC and its owner Edwin Brant Frost IV have been charged with defrauding some 300 investors as part of a Ponzi scheme.
According to the SEC, First Liberty and Front bilked investors of at least $140 million. Between 2014 and June 2025, First Liberty and Frost offered retail investors promissory notes and loan participation agreements that offered up to 18 percent. The company said investor funds would be used to make short-term bridge loans to businesses at relatively high interest rates. The defendants told investors that very few of the loans had defaulted and that they would be repaid by borrowers via Small Business Administration or other commercial loans. The SEC also said while some investor funds were used to make bridge loans, those loans did not perform as represented and that most of the loans ultimately defaulted and ceased making interest payments.
Since at least 2021, the SEC said, First Liberty operated a Ponzi scheme by using new investor funds to make principal and interest payments to existing investors. As part of the SEC complaint against the company and its owner, the SEC alleges that Frost misappropriated investor funds for personal use, including using fund 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 a family vacation.
“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. “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 charged First Liberty and Frost with violating the antifraud provisions of the federal securities laws. The agency seeks emergency relief including freezing assets, appointing a receiver over the entities and granting an accounting and expedited discovery. Additionally, the SEC seeks permanent injunctions and civil penalties against the defendants, a conduct-based injunction against Frost, and disgorgement of ill-gotten gains with a prejudgment interest against the defendants.
First Liberty and Frost consented to the SEC’s requested emergency and permanent relief with monetary remedies to be determined at a later date.