Son of First Liberty exec resigns from GOP committee
First Liberty Building and Loan in Newnan, Georgia. (FOX 5)
ATLANTA - Brant Frost V, the son of a financial executive at the center of a federal fraud investigation, has resigned from the Georgia Republican State Committee, party officials confirmed Friday. He also plans to step down as chairman of the Coweta County Republican Party, according to the Capitol Beat.
What we know:
The move comes as First Liberty Building and Loan, a financial institution led by Frost’s father, Edwin Brant Frost IV, faces a federal lawsuit filed by the U.S. Securities and Exchange Commission. The SEC accuses First Liberty of operating as a Ponzi scheme, raising at least $140 million from roughly 300 investors and using their funds for personal enrichment—including more than $570,000 in political donations and at least $5 million in payments to Frost and his family.
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Georgia Secretary of State Brad Raffensperger launched a state investigation this week and called on political candidates to return donations linked to First Liberty or the Frost family, which has deep ties to Republican politics in Georgia.
What they're saying:
State GOP Chairman Josh McKoon said in a statement that Frost’s resignations are voluntary and not an admission of guilt. "We in no way consider his resignations as an indication of guilt in the pending legal issues of First Liberty Building and Loan," McKoon said. "We continue to stand with those who have suffered financial losses and hope for the speedy and full return of their investments."
McKoon added that Frost’s decision was made so he could focus on his family and the upcoming birth of his first child. A special election to choose his successor as Coweta County GOP chair will be held within 30 days.
The backstory:
The Securities and Exchange Commission announced July 10 that it filed a civil complaint against First Liberty Building & Loan, LLC, a now-shuttered Newnan-based firm, and its founder, Edwin Brant Frost IV. The SEC alleges the firm misled investors into purchasing promissory notes and loan participation agreements with promised returns of up to 18 percent.
According to the SEC, Frost and First Liberty told investors their money would be used to make short-term bridge loans to small businesses at high interest rates. Investors were led to believe that the loans were low-risk, typically repaid by borrowers through commercial or Small Business Administration financing.