Secretary of State fines Edwin Brant Frost V: $140M Ponzi scheme probe expands

ATLANTA - A former Georgia Republican State Committee member faces a half-million-dollar fine and was referred for potential criminal prosecution after the probe into an alleged $140 million Ponzi scheme expanded.

Edwin Frost V fined $500K

What we know:

The Georgia Secretary of State’s office Wednesday ordered Edwin Brant Frost V to immediately cease and desist all violations of the Georgia Uniform Securities Act of 2008 and pay a civil penalty of $500,000. The emergency order officially bars Frost V from acting as a broker-dealer agent or investment adviser in the state, finding that he transacted business without being registered.

Regulators accuse Frost V of making "untrue statements of material fact" while soliciting investments for his father’s firm, First Liberty Building and Loan. The commissioner of securities alleges that investor funds were not used as represented but were instead part of a massive Ponzi scheme. The order claims Frost V failed to disclose critical conflicts of interest, including the fact that he was personally invested in the same loan programs he pitched and received more than $100,000 in principal repayments while other investors suffered losses.

Four investors lost $4.6M

Dig deeper:

The state’s investigation highlights several specific investor claims that illustrate the alleged fraud:

• Investor #1: Frost V reportedly solicited a $250,000 investment and, just days before the firm collapsed, texted this investor to ask for a "recurring donation to [a] state representative" who he called a "great ally."
• Investor #2: A close family friend who, along with their family, invested $1.1 million based on what the state calls misrepresentations and omissions. Four of these family members are over the age of 75.
• Investor #3: After being told that "business is booming," this investor wire-transferred an additional $50,000 just two months before First Liberty failed; they have yet to receive their $550,000 principal.
• Investor #4: When asked if certain deals were "definitely happening," Frost V allegedly replied "Yes 90%," despite some of those opportunities later being deemed a "total loss."

Frost could face prosecution

What we don't know:

Significant questions remain as the case shifts toward the local prosecutor. While the Secretary of State has referred the file to the Coweta County District Attorney, it is not yet known if or when formal criminal charges will be filed. Additionally, a court-appointed receiver has recovered only about $3.5 million of the lost assets, leaving roughly $136 million in investor funds still unaccounted for.

The Frosts and Georgia GOP

Why you should care:

The Frost family has been deeply entrenched in the "grassroots" of Georgia’s Republican politics for decades. Edwin Brant Frost IV, the firm's founder, has previously apologized for his role in the scheme, which federal authorities say funneled more than $570,000 into political campaign coffers.

His son, Frost V, served as the second vice-chair of the Georgia GOP and chairman of the Coweta County Republican Party before resigning those posts as the investigation intensified. He also led the Georgia Republican Assembly PAC, which is currently facing 61 state ethics violations for allegedly failing to report over $220,000 in expenditures. Critics have pointed to these political ties, with some local activists labeling the family's continued influence a "slap in the face" to those who lost their life savings.

How did it unfold?

Timeline:

October 2008: Edwin Brant Frost V begins employment at First Liberty Building and Loan, founded by his father, Edwin Brant Frost IV.

2014: First Liberty begins raising capital through loan participation agreements offered to "friends and family."

August 2, 2022: Frost V solicitates Investor #2 for a loan participation agreement with a promised 25% total return.

February 13, 2024: Frost V texts Investor #4 about medical practice opportunities via "My Health AI," which was later described by receivers as a "total loss".

September 2024: Frost V solicitates Investor #1 to invest $250,000 into a promissory note with a 13% APR.

January 5, 2025: Investor #3 invests $500,000 into a First Liberty promissory note after solicitation from Frost V.

June 23, 2025: Just days before the company fails, Frost V texts Investor #1 to solicit a recurring donation for a state representative described as a "great ally."

June 27, 2025: First Liberty Building and Loan officially closes its doors.

July 1, 2025: The Georgia Commissioner of Securities becomes aware of First Liberty's collapse and begins an official investigation.

July 10, 2025: The SEC files a formal complaint against First Liberty and Frost IV, labeling the operation a $140 million Ponzi scheme.

July 17, 2025: The Commissioner issues a subpoena to Frost V regarding the First Liberty matter.

August 1, 2025: Frost V resigns from the Georgia Republican State Committee.

August 6, 2025: Frost V's active Insurance Resident Agent license becomes effective.

December 19, 2025: The Commissioner takes Frost V's testimony under oath; Frost V claims his new entity, Heartland Capital, LLC, had seen "no further action other than the basic creation."

January 30, 2026: Georgia Secretary of State Brad Raffensperger appoints a specialized investigative agent to lead the state's probe into the Ponzi scheme.

February 9, 2026: At a town hall event, the court-appointed receiver reports having $3.59 million in assets on hand to repay $140 million in claims.

February 11, 2026: The Secretary of State formally opens a secondary investigation into First Liberty borrowers, specifically Global Onboard Partners, LLC.

February 17, 2026: The Commissioner issues the Emergency Order barring Frost V from the securities industry, imposing a $500,000 fine, and referring the case for potential criminal prosecution.

How much money was moved?

By the numbers:

The total scheme

• $140 million: The total amount federal and state investigators allege was defrauded from approximately 300 investors between 2014 and 2025.
• $19 million+: The amount the SEC alleges founder Edwin Brant Frost IV misappropriated for himself, his family, and affiliated companies. Other reports specifically note at least $5 million was funneled directly to the Frost family for personal use.

Individual investor losses

• $1.45 million: The total amount invested by one family (Investor #3) mentioned in the emergency order.
• $1.3 million: Lost by a 94-year-old investor who had hoped to use the funds to care for his ailing sister.
• $1.1 million: The total lost by the family of "Investor #2," which included four members over the age of 75.
• $750,000: Lost by a retired electrical worker who was preparing to invest even more just before the firm collapsed.

Political and personal spending

• $1.4 million to $1.5 million: Total political and charitable contributions identified as being tied to the Frost family and their companies.
• $570,000 to $572,800: The specific portion of investor funds the SEC alleges was used for these political donations.
• $2.4 million: Amount allegedly used for personal credit card payments.
• $335,000: Amount spent at a rare coin dealer.

Current recovery status

• $3.59 million: The total assets held by the court-appointed receiver as of late December 2025.
• $300,000+: The amount of political donations successfully clawed back for victims so far.
• $500,000: The civil penalty Edwin Brant Frost V has been ordered to pay to the state.

‘Mr. Frost denies the allegations’

What's next:

Frost V has the right to challenge the state's findings. He can request a hearing within 30 days of receiving the order. If he does not request a hearing, the emergency order, including the $500,000 fine, will become final by operation of law. His attorney, Christopher J. Huber, has already stated that "Mr. Frost denies the allegations" and argued the state "rushed to judgment."

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