Dozens of victims who lost their money in an alleged Georgia-based Ponzi scheme will get it all back as part of a $6.7 million agreement with the retirement and insurance firm, Bankers Life.
First Liberty Building and Loan and its owners, Brant Frost IV and Brant Frost V, are under investigation by state and federal authorities.
The SEC said First Liberty is a $140 million Ponzi scheme that targeted Christian conservatives and was closely connected to Georgia Republican leaders.
Former Bankers Life financial adviser Nathaniel Darnell allegedly steered 46 of his investment clients to move money into First Liberty, and now Bankers Life has agreed to pay all those clients back for any losses.
“I want to sincerely thank Bankers Life for acting with integrity. They, as a company, chose to do the right thing and help the Georgians who lost everything in this alleged Ponzi scheme,” said Georgia Secretary of State Brad Raffensperger.
The Secretary of State’s Office said Darnell knowingly misled investors for five years at his job and recruited them into First Liberty.
The majority of those Darnell clients were senior citizens.
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A powerful figure in Georgia conservative politics, Darnell is the current president of the Georgia Republican Assembly and past chairman of the Cobb County Republican Party.
“When it was revealed that Mr. Darnell allegedly used his position as adviser at Bankers Life to encourage investments into First Liberty, something that is in direct violation of the company policy, the company reached out to our office to see how they could make it right,” Raffensperger said.
Bankers Life tells Channel 2 Action News in a statement:
“When we became aware of the allegations against Timothy Nathaniel Darnell, we terminated his association with our firm for failure to disclose outside business activities that were the subject of the Georgia Commissioner’s emergency order and cooperated with authorities. Our business is built on trust, and our clients come first, which is why we agreed to make a monetary contribution to a fund that compensates affected Georgians.”
The Secretary of State’s Office urges anyone who thinks they were a victim of First Liberty to reach out to them.
Jason Doss, the special investigative agent brought in to investigate First Liberty, said more major financial institution names are also in First Liberty records.
“If it’s marked as a referral fee, then we’re going to follow up with that because that means they got paid for something and it’s for soliciting investors,” Doss said.
Raffensperger says his office is looking into more settlements.
“While this is the first of these types of agreements, I hope it is not the last,” Raffensperger said.
So far, Raffensperger’s office has fined Frost IV, Darnell, and Fayette County School Board member Randy Hough $500,000 and referred them for possible criminal charges.