NEWNAN, Ga. — A prominent Georgia Republican was running a Ponzi scheme that defrauded 300 investors of at least $140 million, federal officials alleged in a complaint filed Thursday.
The civil lawsuit by the U.S. Securities and Exchange Commission said First Liberty Building and Loan, controlled by Brant Frost IV, lied to investors about its business of making high-interest loans to companies. Instead, investigators said, it raised more money to repay earlier investors.
Frost is alleged to have taken more than $19 million of investor funds for himself, his family and affiliated companies even as the business was going broke, spending $160,000 on jewelry and $335,000 with a rare coin dealer. Frost is also said to have spent $320,000 to rent a vacation home over multiple years in Kennebunkport, Maine, the town where the family of late president George H. W. Bush famously spent summers.
The SEC said Frost kept writing checks even after the commission began its investigation
First Liberty said last month that it would stop making loans and paying interest and principal to investors in those loans. The company said it was not answering phone calls or emails.
First Liberty has not responded to an email seeking comment, and no one was present at its office Thursday evening in Newnan, a suburb southwest of Atlanta. A lawyer who acts as the company's registered agent for corporate purposes said earlier that he had no information.
The collapse rocked the religious and political networks that the business drew investors from. It also could have ramifications in state Republican politics, cutting off funding to the far-right candidates that Frost and his family have favored. Investigators said Frost spent $570,000 from investor funds on political contributions.
The SEC said the business had only $2.67 million in cash as of May 30, although regulators are also seeking to claw back money from Frost and associated companies. With 300 investors out $140 million, that means the average investor put in nearly $500,000.