Georgia Businessman Sentenced to 15 Years for $76M Ponzi Scheme
Edwin Brant Frost IV defrauded at least 300 investors out of $76M via his firm First Liberty. He must also repay the full amount in restitution.
Newnan Businessman Frost Gets 15-Year Federal Prison Term in Ponzi Case
A federal judge has sentenced Edwin Brant Frost IV, a prominent Georgia Republican donor and Newnan businessman, to 15 years in prison for wire fraud, cbsnews.com reports. Frost must also pay more than $76 million in restitution to victims of a large-scale Ponzi scheme he operated through First Liberty Building and Loan.
Frost had pleaded guilty to one count of wire fraud following a federal investigation launched after First Liberty collapsed last June. The company presented itself as a lender offering high-interest short-term "Bridge Loans" to businesses, promising investors returns of between 8 and 18 percent. Prosecutors say Frost instead diverted millions for personal use.
Court records show Frost spent the investor funds on a vacation rental in Maine, jewelry and watches, more than $2 million in credit card payments, and over $570,000 in political contributions. By 2021, investigators say, First Liberty could no longer meet its financial obligations, at which point Frost falsely told investors that borrowers had received pre-approval from the Small Business Administration.
Prosecutors estimate Frost raised at least $76 million from at least 300 investors. Among those who suffered losses were a company linked to former Georgia GOP Chairman David Shafer, Alabama State Auditor Andrew Sorrell, and a political action committee controlled by Sorrell. Party activists said many grassroots Republicans were also among the victims, some of whom were reached through advertisements on conservative radio and media programs hosted by Erick Erickson, Hugh Hewitt, and the late Charlie Kirk.
U.S. Attorney Theodore S. Hertzberg issued a pointed statement at sentencing. "Like a false prophet and ravenous wolf in sheep's clothing, Frost used religion, politics, and promises of profitable returns to lure investors into giving him their hard-earned money," Hertzberg said. "This was a stunning, sinful, and sacrilegious abuse of trust that wrecked hundreds of investors, including retirees and seniors who lost their life savings."
In addition to the 15-year term, the judge ordered three years of supervised release following Frost's imprisonment.
Earlier this year, the Georgia Secretary of State's office announced a separate settlement: Bankers Life Advisory Services and Bankers Life Securities agreed to pay $6.7 million to 46 alleged victims connected to the scheme.
Source: NYT US News