Federal authorities are accusing a prominent Christian conservative of running a $140 million Ponzi scheme.
Edwin Brant Frost IV, a businessman who once ran televangelist Pat Robertson’s presidential campaign in Georgia, allegedly took money from investors and used it to pay other investors and to buy himself and his family nice things. The Securities and Exchange Commission (SEC) claims Frost spent $335,000 on rare coins, $230,000 on family vacations in Maine, and $160,000 on jewelry.
He also made more than $570,000 political donations and spent $2.4 million on credit cards, according to the SEC.
First Liberty Building and Loan promised investors that their money would go to bridge loans for small businesses, reaping returns of up to 18 percent.
Frost’s son, state Republican Party official Edwin Brant Frost V, told potential investors this was a way to “grow the patriot economy.” He said the suburban Atlanta company helped retired teachers and ministers “as well as doctors, lawyers, and everyone else you can imagine.”
The investment opportunity was heavily promoted on political podcasts and radio programs and endorsed by conservative Christian commentators. Erick Erickson praised the Frosts as “a good Christian family” and said he knew them personally and they were “wonderful people.” Hugh Hewitt called the elder Frost “Georgia’s George Bailey,” comparing him to the hero in the movie It’s a Wonderful Life.
First Liberty was neither chartered nor insured as a bank, however. It did not accept deposits, only investments, starting at $25,000.
Some of the money did go to small businesses, many of which struggled to pay back what they owed, according to the SEC. Federal investigators also found increasing sums went to payments to old investors, who were encouraged to invest more and keep the whole thing going.
In a little more than a decade, the company got about 300 people involved the Ponzi scheme, according to the SEC investigation.
The Newnan Times-Herald identified one of them as John Vander Wiele, the owner of a recycling company with about 40 employees. When he sold a piece of property, he decided to put $25,000 into the financial opportunity he had heard about on conservative Christian podcasts.
Vander Wiele liked the fact that First Liberty was led by, as it said on the website, “authentic followers of Christ.” The Brants emphasized this when they met him in person too.
“They told me they were Sunday school teachers and churchgoers,” Vander Wiele told the Georgia newspaper. “It was like lending money to your neighbor. You feel good about it because you know where he lives.”
Joe Hubbard, a retiree, said he and his wife put their life savings into First Liberty investments. They also heard about the plan to “grow the patriot economy” on a political talk show. They met the Brants in person before investing and talked about church, Sunday school, and their shared conservative values.
The Hubbards don’t yet know whether they will ever see any of their money again.
“We’re out of our minds,” Hubbard said to The Newnan Times-Herald. “We can’t eat or sleep. We don’t know where to turn.”
One of the last things investors received from First Liberty before the company shut down was an email about more investment opportunities. The younger Frost said there was “very strong loan demand” and the investments were “helping local small businesses become great businesses!”
First Liberty always claimed it was lending money to people who were going to get loans from the Small Business Administration or commercial banks, allowing the small businesses to quickly pay off the borrowed bridge funding, earning investors between 8 and 18 percent interest.
The promised amount should have been a red flag, according to Justin C. Jeffries, an SEC associate director in Atlanta.
“We’ve seen this movie before—bad actors luring investors with promises of seemingly over-generous returns,” Jeffries said, “and it does not end well.”
Actual loan repayments did not earn enough to pay investors, according to the SEC investigation. Yet First Liberty kept recruiting more.
Many of the borrowers defaulted, the SEC found. But First Liberty allegedly withheld that information from investors and told people who were interested in investing that defaults were exceedingly rare.
According to the SEC, the company “knowingly, intentionally, and/or recklessly … made untrue statements of material facts and omitted to state material facts, and engaged in fraudulent acts, practices and courses of business.”
A statement on the company’s shuttered website says First Liberty is now “cooperating with federal authorities as part of an effort to accomplish an orderly wind-up of the business.”
The federal court froze Frost family assets on Friday and ordered First Liberty to repay the money it had taken, plus interest.
The elder Frost agreed to the financial terms requested by the SEC without admitting any guilt or specific facts.
“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,” he said in a statement put out by his lawyer. “I would like to apologize personally to those I have harmed, but I am under restrictions which prevent me from doing so.”
Federal prosecutors have declined to say whether they will seek criminal charges. State authorities are also investigating.
The Associated Press reported that First Liberty’s collapse “rocked” conservative Christian networks in Georgia. The company had made generous donations to multiple congressional campaigns, state legislative campaigns, and Republican Party organizations, as well as political action committees promising to fight conspiracies to steal elections from Republicans.
The elder Frost came to prominence in Georgia politics in 1987 with aggressive, insurgent tactics meant to disrupt the Republican establishment and hand power to those he saw as true conservatives. He went on to organize for Pat Buchanan, who pledged to “make America first again,” and Alan Keyes, who warned about the moral crisis facing the country.
Frost had a copy of the December 25, 2000, issue of Time magazine, when George W. Bush was named person of the year, framed in his office. He said that God “clearly raised up Donald Trump for such a time as this” and that the 2025 inauguration would spark “a new and amazing awakening to our land.”
In an interview with historians documenting the modern conservative movement in Georgia, Frost said he became a born-again Christian in 1980 at a multilevel marketing business event.
