Federal and state authorities have charged Edwin Brant Frost IV and his Newnan, Georgia, firm First Liberty Building & Loan with running a $140 million Ponzi scheme that drew money from Christian and Republican donors. The SEC filed a civil complaint in the Northern District of Georgia, and the U.S. Attorney’s Office for the same district added criminal wire fraud charges. A court-appointed receiver now controls the firm’s assets, Georgia Secretary of State Brad Raffensperger has secured an agreement to return funds to more than 40 victims, and state ethics officials have flagged an affiliated PAC for illegal election activity.
How First Liberty exploited faith and political networks to avoid detection
The scheme’s staying power traced directly to the communities it targeted. Investors who spoke with reporters described pitches framed for conservative Christians and self-described MAGA supporters, according to AP reporting on the recruitment tactics. Those affinity ties created a built-in trust layer that discouraged the skepticism regulators depend on: victims were less likely to file complaints against someone who shared their church pew or political rally.
Frost and his associates, according to victim accounts, presented First Liberty as a values-driven lender that would put capital to work for causes aligned with investors’ beliefs. That framing made the promised returns sound not just lucrative, but morally attractive. In small-group meetings, church gatherings, and political circles, the opportunity was often introduced by a familiar face rather than a cold call, further lowering defenses.
A connected PAC added another shield. Georgia ethics officials determined that a political action committee tied to the scheme illegally sought to influence elections, blurring the line between campaign activity and investor payouts. Money cycling through political channels is harder for securities regulators to trace than ordinary brokerage flows, and the PAC’s existence gave the operation a veneer of civic legitimacy that kept questions at bay. Raffensperger has publicly called for the return of political contributions from First Liberty affiliates, a step that signals the state views those donations as tainted by fraud proceeds.
Affinity frauds often rely on victims’ reluctance to accuse leaders within their own communities, and First Liberty appears to have followed that pattern. Even when red flags emerged – delayed payments, shifting explanations, or pressure to roll over maturing investments – investors were inclined to give Frost the benefit of the doubt. That hesitation bought the scheme time and allowed losses to deepen before authorities intervened.
SEC complaint, wire fraud charges, and the receivership estate
The civil and criminal cases landed in quick succession. The SEC complaint alleges that First Liberty Building & Loan sold investment products whose returns were funded not by legitimate business activity but by incoming money from newer investors, the classic Ponzi structure. Frost, who owned the firm, is named as the primary defendant, along with affiliated entities that allegedly helped channel investor funds.
According to the SEC, investors were promised steady, above-market yields supposedly backed by real-estate lending and other secured transactions. In reality, regulators say, First Liberty used new deposits to pay earlier participants and to cover operating costs, while providing investors with account statements that masked mounting shortfalls. The agency is seeking injunctions, disgorgement of ill-gotten gains, and civil penalties.
The U.S. Attorney’s Office for the Northern District of Georgia then charged Frost with wire fraud, escalating the matter from a regulatory enforcement action to a criminal prosecution that carries the possibility of prison time and restitution orders. Prosecutors allege that Frost used interstate communications to solicit and misappropriate investor funds, and that he misrepresented both the safety of the investments and the use of proceeds.
The receivership case, filed as 1:25-cv-3826-MLB in the Northern District of Georgia, placed court-appointed receiver Gregory Hays in control of the First Liberty entities. Acting under federal court supervision, Hays is charged with identifying, securing, and liquidating assets that can be returned to victims. The investor notice from Raffensperger’s office directs affected investors to the receiver for claims information and warns the public not to send any additional money to First Liberty or its affiliates.
On the state enforcement side, Raffensperger’s office issued multiple orders and a criminal referral related to unregistered securities sales and misleading offerings. His staff negotiated an agreement with Frost and certain entities to return funds to more than 40 Georgia investors, an early recovery that sits alongside the broader federal receivership process. State officials have emphasized that this initial pool of repayments does not fully compensate victims, but it provides a measure of relief while the longer federal asset-tracing effort unfolds.
What victims can expect next
With both civil and criminal cases underway, the timeline for full resolution is likely to stretch over years. The receiver must reconstruct years of financial flows, locate any remaining assets, and propose a distribution plan that the court will review. Parallel criminal proceedings will determine whether Frost is convicted and, if so, what restitution obligations are imposed.
For now, regulators are urging investors to document their losses, respond promptly to receiver communications, and be wary of anyone offering to “fast-track” recoveries for an upfront fee. The same trust-based networks that helped First Liberty grow, authorities warn, can also be exploited by secondary scams that target people already reeling from the collapse.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
