The U.S. Securities and Exchange Commission filed a complaint against Edwin Brant Frost IV of Georgia and his First Liberty Building & Loan, LLC, alleging the business was operated as a Ponzi scheme.
The document asserts that Frost and his company « raised at least $140 million from approximately 300 investors through the sale of loan participation agreements and promissory notes that offered annual returns of 8% to 18%.
« As of 2021, approximately 80% of interest and principal payments to investors were sourced from new investor funds, and not from Bridge Loan interest payments or principal repayments, » the SEC complaint claims.
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The SEC alleged Frost spent investor funds in various ways, some of which included making more than $570,000 in political donations, buying a $20,800 watch and making « over $2.4 million in payments to credit cards issued to him and his business entities. »
The Associated Press indicated that Frost is a Republican.
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« The promise of a high rate of return on an investment is a red flag that should make all potential investors think twice or maybe even three times before investing their money, » said Justin C. Jeffries, associate director of enforcement for the SEC’s Atlanta regional office, according to a press release.
« Unfortunately, we’ve seen this movie before — bad actors luring investors with promises of seemingly over-generous returns — and it does not end well. »
Lawyer Joshua Mayes of Robbins Alloy Belinfante Littlefield LLC is representing Frost in the matter, and he provided Fox News Digital with a statement from Frost, who admitted he had misled people.
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« I take full responsibility for my actions and am resolved to spend the rest of my life trying to repay as much as I can to the many people I misled and let down. I will be cooperating with the receiver and federal authorities and ask that everyone allow the receiver time to sort things out and do his best to repair the damage I created, » Frost noted in the statement.
« I would like to apologize personally to those I have harmed, but I am under restrictions which prevent me from doing so. While I do not deserve it, I am grateful for the support of friends and family as I confront this situation I created. »
Source link : https://www.foxnews.com/politics/georgia-man-accused-sec-perpetrating-ponzi-scheme-says-he-takes-full-responsibility-his-actions
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Publish date : 2025-07-11 20:23:00
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