State investigates company alleged to run a Ponzi scheme

Georgia Secretary of State Brad Raffensperger has initiated an inquiry into a company accused of perpetrating a Ponzi scheme that defrauded investors while simultaneously funnelling money into political campaigns.

This development comes on the heels of a legal action taken in mid-July by the U.S. Securities and Exchange Commission (SEC) against Edwin Brant Frost IV and his firm, First Liberty Building and Loan.

Individuals who have interacted with First Liberty but have not yet filed an official complaint with the Securities Division are advised to do so through the appropriate channels available on the Secretary of State’s website. The state agency assured that all individuals contacting the office will be treated with confidentiality.

The Securities Division is responsible for regulating the securities industry in Georgia, which includes managing investment products.

Raffensperger has urged political figures to refund any campaign donations received from First Liberty or the Frost family, who have been actively involved in state Republican politics.

According to the SEC lawsuit, Frost diverted investor funds to the tune of over $570,000 towards political contributions.

In response, the Georgia Republican Party disclosed that it had reimbursed almost $37,000 in received funds to the court-appointed receiver for First Liberty.

The company managed to raise a minimum of $140 million from around 300 investors, with Frost allegedly misusing the funds to pay himself and his family a total of at least $5 million.

Raffensperger stated that his office is making efforts to contact investors associated with First Liberty. Alongside encouraging them to lodge complaints, the agency is soliciting their participation in an online survey to aid in the investigative process.

The survey form assures respondents that their feedback will be handled in a confidential manner.