ATLANTA — The state of Alabama is now going after a Newnan investment firm after the SEC accused it of being a Ponzi scheme.
First Liberty Building and Loan’s founder and owner, Edwin Brant Frost IV, advertised heavily on conservative media and with church organizations, claiming to be part of the so-called “patriot economy.”
But feds say Frost kept millions for himself and his family and used more than $500,000 to donate to candidates and political action committees.
Federal investigators accuse First Liberty of being a $140 million Ponzi scheme.
Now the state of Alabama has filed its own lawsuit against First Liberty, and its Secretary of State is calling on politicians to return any contributions that they may have gotten from Frost.
“I take allegations of financial fraud seriously, especially when that fraud bleeds into campaign finance,” Alabama Secretary of State Wes Allen said. “I encourage any Alabamians who have been involved to cooperate fully with law enforcement, including the SEC and our Alabama Securities Commission, it’s to ensure that the victims who have been misled may be made whole.”
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Just last week, Channel 2 Action News was there as Georgia Secretary of State Brad Raffensperger handed over an $8,400 check to the court-appointed, receiver that he had received from Frost.
Raffensperger told Channel 2’s Richard Elliot that he received the money from Frost in 2018 but still wanted to return it anyway.
He’s encouraging other politicians to do the same.
“I think everyone needs to have a moral compass, and my moral compass said people are hurting and I need to give this money back,” Raffensperger said.
The securities division of Raffensperger’s office is also investigating First Liberty.
In a statement through his attorney, Frost took responsibility for First Liberty and said he wanted to apologize for misleading people.
Currently, this is a civil investigation, but sources confirm the FBI is investigating this as well.