A Georgia man, Edwin Brant Frost IV, and his company, First Liberty Building & Loan, are accused by the SEC of running a massive Ponzi scheme. The alleged fraud involved around 300 investors and a staggering $140 million.
How the Scheme Worked
Between 2014 and June 2025, Frost’s company offered investors promissory notes and loan participation agreements. These promised returns of up to 18% on short-term business loans, claiming a low default rate. Investors were told that any defaults would be covered by funds from the Small Business Administration or other lenders.
However, starting in 2021, the SEC alleges that Frost used money from new investors to pay off earlier investors – a classic Ponzi scheme. He allegedly also misused a significant portion of the funds for personal expenses, including buying rare coins, paying off personal debts, and taking vacations.
Frost’s Confession and SEC Response
The SEC’s complaint accuses Frost and his company of defrauding 300 investors out of $140 million. Justin C. Jeffries, Associate Director of Enforcement for the SEC’s Atlanta Regional Office, warned about the dangers of high-return investments, stating that such promises should be a major red flag.
In a statement to Fox News, Frost admitted his guilt and said he plans to cooperate with investigators. He expressed remorse and stated his intention to work towards repaying the victims.
A Word of Caution
This case serves as a reminder to be extremely cautious when considering high-yield investment opportunities. Always conduct thorough due diligence and consult with a financial advisor before investing.