NEWNAN, Ga. — In federal court on Monday, the receiver put in place to handle assets of Newnan-based First Liberty Building & Loan argued it should be allowed to recover money from those borrowers to try to pay back restitution for jilted investors.
“These were all real loans. They got value out of this and don’t want to pay it back,” argued Henry F. Sewell, attorney for the receiver.
In November, a federal judge allowed the receiver to move forward with auctioning off items and property of what federal investigators allege was a $140 million Ponzi scheme.
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In September, the receiver appointed to manage the company’s assets asked permission to auction off the items to pay investors back the funds they put into the company.
In a December 15 court filing, the receiver said, “The primary asset of the Receivership consists of approximately sixty individual, defaulted loans that were made with investor funds to certain borrowers.”
But some of those borrowers now claim they are also victims of this Ponzi scheme.
“From the first day of the Purported loan to the last day of First Liberty’s business operations, Movants were victims of Brant Frost’s ongoing fraud,” attorneys for Movants Full Circle LLC claimed in a court filing.
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James McMaster, 94, was in court to observe the hearing.
In August, Channel 2 Consumer Investigator Justin Gray first reported on McMaster investing $1.3 million in First Liberty.
“Right now, it doesn’t appear that there’ll be much of a pie to cut up. It’s hard to believe that $140 million just got lost,” McMaster said.
Judge Michael Brown called this a “classic Ponzi scheme” as he laid out a framework for the receiver to collect money from the borrowers of First Liberty.
The conservative-leaning investment firm, owned and operated by Edwin Brant Frost IV, has been under federal and state investigation on allegations of using investor funds on personal luxury and making donations to Republican political causes.
According to a legal filing by the U.S. Securities and Exchange Commission, Frost allegedly spent lavishly with investors’ money, with some of the money going toward:
- $570,000 going to political donations
- $140,000 in jewelry
- $20,000 Patek Phillippe watch
- $335,000 to a rare coin dealer
Frost is accused of transferring $5 million to himself and members of his family.
In the wake of the investigation and allegations, Georgia Republican Party leaders returned funds donated by the company.
Federal investigators have called the allegations a $140 million Ponzi scheme. State officials said the alleged scheme was at the center of the largest fraud investigation in the Georgia Secretary of State’s Office history.
Among the assets to be auctioned is a 2006 Aston Martin DB5, a 2011 LNDR Range Rover Sport, a 2011 Range Rover Sport, a 2017 LNDR Range Rover, a 2013 Nissan Rogue, and the office building in downtown Newnan that Frost worked out of.
“By this Motion, the Receiver requests authority to sell the Aston Martin, the Additional Vehicles, the Newnan Office, and Other Property via public auction,” receiver Greg Hays said in his motion to the court in September.
The lending company abruptly shut down in July amid a federal investigation into misappropriated funds.
The receiver said in court that it plans to first collect money and assets from borrowers, then handle possible restitution to investors.
As of now, there is still not a full and complete list of investors and what they paid into First Liberty.
The receiver now has financial data from Truist they expect to provide that information.
They plan to start a claims process for those investors in early 2026.
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