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PulseReporter > Blog > Money > Republican banker accused in $140 million Ponzi scheme
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Republican banker accused in $140 million Ponzi scheme

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Last updated: July 11, 2025 4:06 am
Pulse Reporter 9 hours ago
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The Securities and Alternate Fee has accused Edwin Brant Frost IV and his personal lending firm First Liberty Constructing & Mortgage with allegedly presiding over a complicated $140 million Ponzi scheme, in line with a civil criticism filed on Thursday in federal courtroom in Atlanta. 

Authorities declare Frost, 67, particularly focused Republican activists and conservative Christian buyers by a community of right-wing media shops. The Georgia monetary agency’s now-defunct web site calls out its ads “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 packages had 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 staff aren’t licensed to make any additional communications right now concerning the continued state of affairs, and nobody on the firm will likely be out there to reply telephone calls or reply to e mail inquiries.”

Makes an attempt to succeed in Frost had been unsuccessful. 

In line with the criticism, Frost and First Liberty raised no less than $140 million from the sale of mortgage participation agreements and promissory notes to no less than 300 buyers. The alleged scheme started again in 2014 with Frost elevating capital by family and friends. They had been first provided mortgage participation agreements, that are contracts the place buyers pool cash collectively to fund a single mortgage with every participant proudly owning a share. They had been later provided promissory notes—principally IOUs— during which buyers had been lending cash to the corporate itself. Brant allegedly instructed buyers the funds can be used to make short-term bridge loans at excessive rates of interest. 

Frost and First Liberty allegedly instructed buyers 100% of the proceeds from mortgage agreements and promissory notes can be used to fund bridge loans and that buyers can be reap features from the reimbursement 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 buyers orally he didn’t take charges out of the investor funds. 

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

“The promise of a excessive fee of return on an funding is a purple flag that ought to make all potential buyers assume twice or possibly 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—unhealthy actors luring buyers 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 packages. The corporate marketed itself as a elementary piece of what it referred to as the “patriot financial system.”

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

Through the alleged scheme, the SEC accused Frost of residing lavishly off buyers’ belongings. 

Frost allegedly spent $230,000 to lease 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 makes a speciality of promoting gold cash. The SEC has frozen Frost’s belongings.

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

In a message on the web site, First Liberty wrote: “First Liberty hopes to offer further 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.”

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