ATLANTA – Georgia Secretary of State Brad Raffensperger is asking on candidates and political committees to return any marketing campaign contributions obtained from First Liberty Constructing & Mortgage, the Frost household, or affiliated entities now below investigation for allegedly defrauding a whole lot of buyers in an enormous Ponzi scheme.
Raffensperger on First Liberty Constructing & Mortgage
What they’re saying:
“Now’s the time for each elected official, candidate, or political motion committee who obtained monetary help from this entity at present below investigation to face up and assist the victims,” Raffensperger mentioned in a press release Monday. “Ailing-gotten features don’t belong within the State Capitol.”
The assertion follows a federal civil criticism filed by the Securities and Alternate Fee final week towards First Liberty and its founder, Edwin Brant Frost IV. The SEC alleges that Frost misled buyers for greater than a decade, promising returns as excessive as 18% on investments supposedly used for short-term enterprise loans. Regulators say these loans largely defaulted, and the corporate started utilizing new investor funds to repay outdated ones in a basic Ponzi scheme.
Raffensperger additionally inspired victims to contact the Securities Division of his workplace. “When you’ve performed enterprise with First Liberty and suffered a monetary loss, contact our workplace instantly,” he mentioned. “We take allegations of monetary fraud critically, particularly when it places hardworking Georgians in danger.”
Dig deeper:
The SEC alleges greater than $570,000 of buyers’ earnings was used for political donations. Based on OpenSecrets.org, Edwin Brant Frost IV has donated a number of instances to 2 Republican candidates and to the Republican Get together of Georgia since 2019. A type of candidates returns practically two-thirds of these donations in 2024 after failing to safe a spot of their major.
Ponzi scheme accusations
What we all know:
The SEC says about 300 buyers had been defrauded out of $140 million, with thousands and thousands allegedly diverted to Frost’s private bills — together with $2.4 million in bank card funds, $335,000 to a uncommon coin supplier, and $230,000 on household holidays. First Liberty formally ceased operations on June 27 and has agreed to cooperate with a court-appointed receiver to liquidate belongings.
Victims and their advocates have voiced outrage over the scope and nature of the alleged fraud. “Unhappy that somebody would use somebody’s religion in God and religion in our nation to steal their cash,” mentioned Texas lawyer Jim Clancy, who represents a number of victims. Others, like Marcy Walker, say households have been devastated. “These had been households’ life financial savings. I do know one household that won’t even be capable to ship their youngsters again to the colleges that they’ve chosen as a result of they’ve misplaced a lot cash.”
First Liberty marketed closely to conservative and Christian audiences. In a single promotional video, Frost described the corporate as serving to “mainstream entrepreneurs to purchase, construct and develop issues for just about any sort of industrial venture.”
“It’s horrible to take individuals’s cash within the title of patriotism, within the title of Jesus,” Walker mentioned.
The opposite facet:
The SEC’s criticism, filed within the U.S. District Courtroom for the Northern District of Georgia, seeks emergency aid, together with an asset freeze and civil penalties. Frost, with out admitting or denying the allegations, consented to the SEC’s requests. His lawyer, Joshua A. Mayes, launched a press release on Frost’s behalf:
“I take full accountability for my actions and am resolved to spend the remainder of my life attempting to repay as a lot as I can to the many individuals I misled and let down. I shall be cooperating with the receiver and federal authorities,” Frost mentioned. “Whereas I don’t deserve it, I’m grateful for the help of family and friends as I confront this example I created.”
The Supply: Georgia Secretary of State Brad Raffensperger offered a press release for this text. Earlier FOX 5 Atlanta reporting was additionally used. OpenSecrets.org offered particulars about marketing campaign contributions.
