Georgia GOP faces fallout from $140M First Liberty Ponzi scheme

Frost IV faces October sentencing as donation-return pressure builds

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NEWNAN, Ga. — James McMaster, 94 years old, lost about $1.3 million in the collapse of First Liberty Building & Loan, the Georgia investment firm built by a family of Republican power brokers. When he recently got a call asking him to contribute to a GOP campaign, he had a test for the caller.

“I said, ‘OK, let me tell you. Here’s where I’m at,” McMaster said. ” ‘When you get all the politicians that have received funds from them and get them to return them, then maybe we can talk.’ ”

First Liberty is at the center of a $140 million Ponzi scheme that prosecutors describe as yearslong, and the Frost family that ran it was long among the Georgia GOP’s most influential names. The firm courted investors through conservative outlets such as Erick Erickson’s syndicated radio show and the late Charlie Kirk’s podcast. In 2024, the patriarch’s son, Edwin Brant Frost V, known as “five,” told a John Fredericks streaming-show audience to get in touch, “if you want to participate in the patriot economy and get Wall Street returns for Main Street investors.”

The Securities and Exchange Commission filed a complaint last year against First Liberty and founder Edwin Brant Frost IV. The firm’s headquarters, in a brick building in Newnan’s quaint downtown, closed, and the fallout has since consumed the family, the fast-growing county outside Atlanta that surrounds Newnan — and beyond, according to The Wall Street Journal.

In April, the U.S. Attorney’s Office in the Northern District of Georgia charged Frost IV, now 69, with orchestrating a yearslong scheme to defraud about 300 investors with promises of sizable returns. Prosecutors said he used money raised in part for more than $5 million in “personal and sometimes extravagant expenditures,” including $230,000 to rent a Maine vacation home, $140,000 in jewelry, $20,800 for a Patek Philippe watch, more than $2 million on credit-card bills and more than $570,000 on political contributions. Recipients ranged from Republican state legislators to Donald Trump, according to the office of Georgia’s Republican Secretary of State Brad Raffensperger.

Frost IV and First Liberty solicited people to invest in what were marketed as short-term, high-interest bridge loans to companies, with promises that investors would get returns as high as 18%, according to prosecutors and a civil SEC lawsuit. Some of that money did fund bridge loans, but many of those later defaulted. “Most, if not all, of the funds raised through the publicly advertised offering were either misappropriated or used to make Ponzi-style payments to existing investors,” according to the SEC suit.

Frost IV pleaded guilty to wire fraud in May in a federal courthouse just down the street from what had been First Liberty’s offices. He faces up to 20 years in prison, plus fines and restitution to victims, at a sentencing scheduled for October. “Mr. Frost has accepted responsibility for the conduct at issue,” his attorney, Marc Mukasey, said in a statement. “He is committed to making amends, paying back whatever he owes, and improving himself as a result of this experience.”

The probe has expanded. Raffensperger’s office fined Edwin Brant Frost V $500,000 and barred him from acting as a broker-dealer agent or investment adviser representative in the state. The office also turned over material to the Coweta County prosecutor. An attorney for the son didn’t respond to a request for comment, but legal counsel for him previously publicly said he denies the allegations and argued the state had “rushed to judgment.”

Across Georgia, the Frosts were GOP fixtures and known as prominent evangelical Christians. At a prayer meeting, Frost IV said God told him, “I’m going to clean house, and I’m going to use a broom named Trump.” The Frosts sided with Trump against other Republicans, including Raffensperger and Gov. Brian Kemp, when he disputed his 2020 loss to Democrat Joe Biden in the state, according to the Journal.

Frost V chaired the powerful Coweta County Republican Party and was a former vice chair of the state GOP. At one meeting, he praised the John Birch Society for “fighting the good fight.” A daughter was active in party politics, worked at First Liberty’s charitable arm and appeared as a TV commentator on election integrity and politics.

One longtime Georgia GOP strategist described the Frosts’ influence: “It was always kind of like the way that the Trump endorsement works. Do you have the Frost family on board?” Their business sponsored GOP gatherings, and Frost IV urged many people to invest, according to court filings and GOP activists who were solicited and spoke to The Wall Street Journal. Some did, and lost hundreds of thousands of dollars.

Alex Johnson, chairman of the Georgia Republican Assembly, a conservative activist group the Frosts once helped lead, said the scheme burned, for the most part, conservative Christian families and businesses. “It makes Republicans look corrupt,” he said. “It still looks bad, and it didn’t contribute to party unity.”

The collapse has spawned lawsuits as investors and businesses try to recover funds. The Georgia Secretary of State’s office has recovered millions of dollars for investors, but said tens of millions remained missing. Despite calls to return political donations from the Frosts and First Liberty, most recipients haven’t done so, according to officials at the secretary of state’s office. Raffensperger returned donations from the Frosts, as did Kemp.

Advocates for First Liberty investors burned in the scandal plan to make returning money a political issue in the fall. Lisa Jiminez, a volunteer who set up a First Liberty victims’ group, said, “I’ve got billboards ready to go with all the politicians’ names on it, on both sides of 75,” referring to an interstate highway running through the state. Jiminez, who lives in the small town of Jackson, Ga., southeast of Atlanta, said she formerly voted Republican but is so upset by the First Liberty ordeal she is now an independent and considering voting for Democrats this fall.

Some Republicans worry the controversy will cloud voters’ view of a state GOP that has been troubled by infighting and turmoil since 2020. Rusty Paul, a former state GOP chair, said the Frosts’ abrupt exit from state Republican politics could be healthy for the party in the long run. “It removes a thorn from the body Republican,” he said.