SEC Charges Georgia Loan Executive with Running $140 Million Ponzi Scheme

Federal regulators have charged Edwin Brant Frost IV and his company, First Liberty Building & Loan, with orchestrating a long-running scheme involving the sale of unregistered securities that misled investors and misappropriated millions.

According to the Securities and Exchange Commission (SEC), Frost and First Liberty raised more than $140 million from nearly 300 investors between 2014 and mid-2025 with deceptive promises and improper use of investor funds. The scheme intensified in 2024 as public advertising campaigns solicited more victims, even as defaults mounted behind the scenes.

Who Is Edwin Brant Frost IV, and What Is First Liberty?

Edwin Brant Frost IV, age 67, is a Georgia-based loan executive who founded and operated First Liberty Building & Loan, LLC, headquartered in Newnan, Georgia. He served as the firm’s owner and president throughout the alleged scheme.

First Liberty marketed itself as a small business lender focused on providing short-term “Bridge Loans” to borrowers awaiting approval for long-term SBA financing. Over the years, the firm also operated under or transferred funds to related entities, including First Liberty Capital Partners, First National Investments, MyHealthAI Capital, The Legacy Advisory Group and The Liberty Group. These affiliated companies would later be named as “relief defendants” for receiving investor funds without providing any legitimate services in return.

As of June 27, 2025, First Liberty officially ceased operations and announced it will no longer accept investments or issue loans. All interest payments have been suspended indefinitely, and the firm stated it will not respond to calls or emails while cooperating with federal authorities during the wind-down process.

How the Scheme Was Marketed and Sold

From 2014 through early 2024, Frost and First Liberty sold unregistered promissory notes and loan participation agreements to investors, promising annual returns of 8 – 18%. These offerings were marketed as safe, short-term investments tied to “Bridge Loans” issued to small businesses awaiting SBA or commercial financing.

Early investments came from Frost’s personal network, which was marketed as “friends and family” notes tied to specific borrowers. In these cases, Frost provided details like borrower names, loan terms and exit strategies.

By 2024, however, First Liberty expanded its efforts with a public solicitation campaign. The firm advertised nationally using radio ads, podcasts and its website, offering investment notes that were no longer connected to specific borrowers.

Investors were told that their funds would be used to finance short-term, low-risk Bridge Loans, but in reality, most of the loans defaulted. Although Frost allegedly told some investors that there had only ever been one default, records suggest that up to 90% of loans failed to perform. He also falsely claimed that borrowers had already secured US Small Business Administration (SBA) pre-approvals, giving the impression of minimal lending risk.

Despite these widespread defaults, no formal notices were issued to investors, even though First Liberty’s contracts obligated the firm to disclose borrower financial deterioration or missed payments. Instead, Frost continued to solicit repeat investments, even after several borrowers had filed for bankruptcy.

To sustain interest payments and redemptions, Frost and First Liberty relied heavily on new investor funds. By 2021, the SEC found that approximately 80% of payouts to existing investors came from new money — not loan repayments — a hallmark of a Ponzi-style scheme.

SEC Findings: How Investor Money Was Allegedly Misused

Despite promising investors that their money would be used exclusively to fund short-term Bridge Loans, the SEC alleges that Edwin Brant Frost IV misappropriated millions of dollars for personal expenses, luxury goods, political contributions and affiliated businesses that performed no services in return.

From 2019 to 2025, Frost used investor funds to:

• Transfer more than $5 million to himself and his family members
• Fund a lavish lifestyle, including spending more than $230,000 on a vacation home in Kennebunkport, Maine; $140,000 on jewelry; $20,800 on a Patek Philippe watch; and $335,000 on rare coins
• Contribute more than $570,000 in investor money to political campaigns
• Pay off at least $2.4 million to pay off credit cards tied to himself and his companies
• Funnel millions into companies Frost controlled, including:
  • $630K to First Liberty Capital Partners
  • $1.1M to First National Investments
  • $460K to MyHealthAI Capital
  • $198K to The Legacy Advisory Group
  • $8.3M to The Liberty Group

What the SEC Is Seeking

In its July 2025 complaint, the SEC asked the court to impose a broad set of remedies to address the alleged misconduct and protect remaining investor assets. These include:

• Permanent injunction: The SEC is requesting that Frost and First Liberty be permanently barred from violating federal securities laws, which would make any further misconduct subject to additional legal penalties.
• Asset freezes: The agency seeks to freeze all assets held by Frost, First Liberty and the five affiliated “relief defendants,” which allegedly received millions in investor funds without providing any legitimate services.
• Disgorgement of ill-gotten gains: The SEC is asking for a full accounting and the return of all profits Frost and his companies improperly obtained, plus interest.
• Appointment of a receiver: To prevent further dissipation of assets, the SEC is seeking to appoint a court-supervised receiver to take control of First Liberty and its affiliated entities.
• Civil penalties: Finally, the SEC is asking the court to impose financial penalties on Frost and First Liberty for the alleged violations of securities law.

If granted, these measures would help recover remaining funds and prevent Frost or his affiliates from continuing to solicit or manage investments in the future.

What Investors Should Know

This case highlights the serious risks tied to unregistered securities, especially when they’re marketed as safe or community-based opportunities. What began as a “friends and family” note program eventually grew into a nationwide scheme that allegedly misled hundreds of investors.

Affinity-based frauds often exploit personal trust, making them harder to spot and more devastating when they collapse. When offerings lack transparency and proper oversight, investors may not realize their money is being misused until it’s too late.

“The promise of a high rate of return on an investment is a red flag that should make all potential investors think twice or maybe even three times before investing their money,” said Justin C. Jeffries, associate director of enforcement for the SEC’s Atlanta Regional Office.

The SEC’s action underscores the need for rigorous due diligence. Investors should always verify whether a financial product is registered, who is backing it and how investor funds will actually be used. 

Legal Rights for Investors

Individuals who invested with Edwin Brant Frost IV or First Liberty may have legal options to pursue financial recovery. Depending on the circumstances, investors could seek compensation through civil lawsuits, FINRA arbitration or other legal actions aimed at recovering losses tied to fraud, misrepresentation or breach of fiduciary duty.

Even if criminal charges or SEC enforcement are pending, investors don’t have to wait to assert their rights. Civil litigation and arbitration can run in parallel, offering a path to restitution, particularly when investor funds were misused or diverted under false pretenses.

If you suspect your investment was affected by this scheme, it’s important to have your account and documentation reviewed by a securities attorney who can help determine your best course of action.

How Sonn Law Group Can Help

Sonn Law Group represents investors nationwide in cases involving financial fraud, Ponzi schemes, and investment misconduct. Our team has extensive experience uncovering complex schemes, holding bad actors accountable and helping clients pursue meaningful financial recovery.

We offer free, confidential consultations and work on a contingency fee basis, which means you pay nothing unless we recover funds on your behalf.

If you or a loved one invested with Edwin Brant Frost IV, First Liberty or any affiliated entity, contact us today to discuss your legal options. Call us at 833-912-3000 or complete our online contact form to schedule a case evaluation.