Edwin Brant Frost IV & First Liberty: Ponzi Scheme Allegations

First Liberty Building & Loan, LLC and its founder-owner Edwin Brant Frost IV allegedly orchestrated a Ponzi scheme in which they defrauded hundreds of investors of at least $140 million in funds, according to charges filed by the Securities and Exchange Commission in July 2025.

According to the SEC’s complaint, the defendants effectuated the scheme by raising the funds through the sale of loan participation agreements and promissory notes, representing to investors that “that their funds would be used to make short-term small business loans at relatively high interest rates.” They also allegedly represented to investors that “that these Bridge Loans and interest thereon would be repaid by borrowers via Small Business Administration (“SBA”) or other commercial loans, which Defendants claimed they would help broker.” The pool of investors was initially limited to “friends and family” but eventually expanded to the general public, with investment opportunities advertised on the radio and podcasts, as well as the company’s website.

Despite representations that investors’ funds would be directed towards bridge loans, the defendants “did not use investor funds as represented,” according to the SEC. “While some investor funds were used to make Bridge Loans, those loans did not perform as represented,” the complaint asserts, adding: “Of the Bridge Loans Defendants actually made, only a few have been paid in full. Most Bridge Loans have ultimately defaulted and ceased making interest payments. Defendants, however, have continued to make interest payments to investors on the defaulted loans. Since at least 2021 Defendants have had to use funds raised from new investors to make these interest payments.”

According to the SEC, the majority (“if not all”) of investors’ funds “were either misappropriated or used to make Ponzi-style payments to existing investors.” Mr. Frost allegedly used investor funds to pay both himself and his family members ‘in excess of $5 million,” while also using investors’ money to fund the operations of his affiliated companies. “As recently as May 24, 2025,” the SEC alleges, Mr. Frost “withdrew $100,000 in funds for his personal use.”His alleged misappropriations include the use of investor funds to make more than $2 million in credit card payments; he also allegedly paid “more than $335,000 to a rare coin dealer” and more than $200,000 “on family vacations.”

The SEC has filed fraud charges against Mr. Frost and First Liberty in the US District Court for the Northern District of Georgia. It seeks emergency relief, including an asset freeze, as well as permanent injunctions and civil penalties. More information on the charges is available via the SEC.

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