Newnan, GA. (AP) – A well -known Georgia Republic manages a Ponzi scheme that cheated 300 investors out of at least $ 140 million, according to federal staff in a complaint filed on Thursday.
The civil case by the US Securities and Exchange Commission said the first construction and freedom loan, controlled by Brant Frost IV, lied to investors for his business for lending with high interest rates to companies. Instead, the investigators said, she raised more money to pay off more investors.
Frost is believed to have taken more than $ 19 million investor funds for himself, family and related companies, even when the business breaks, spends $ 160,000 on jewelry and $ 335,000 with a rare coin dealer. It is also alleged that Frost has spent $ 320,000 on hiring a holiday home for several years in Kenbunkport, Maine, the city where the late President George HV Bush family has spent the summer.
SEC said Frost continues to write checks even after the committee began its investigation
The first freedom said last month that it would stop lending and paying interest rates and investor principal in these loans. The company said it did not respond to phone calls or emails.
The first freedom has not responded to an email seeking comment and no one is present in her office on Thursday night in Newnna, a suburb southwest of Atlanta. A lawyer, who acts as a registered agent of the company for corporate purposes, said earlier that there is no information.
The collapse shook the religious and political networks from which business attracted investors. It may also have consequences in state Republican policy, reducing the financing of the end candidates that Frost and his family preferred. Investigators said Frost had spent $ 570,000 from investor funds for political contributions.
SEC said the business has only $ 2.67 million in cash as of May 30, although regulators also seek to return money from Frost and related companies. With 300 investors outside $ 140 million, this means that the average investor has invested nearly $ 500,000.
First Liberty said she had provided loans to companies that needed money while waiting for more conventional loans from the US Small Business Administration. It charges high interest rates – 18% on some loans, according to a document derived from the Associated Press. First Liberty promised investors equally high returns – 16% for 18% loans.
In recent months, the business has been advertising strongly on conservative radio shows, promising “Wall Street return for Main Street investors”.
“The promise of a high rate of return on the investment is a red flag that should make all potential investors think twice or maybe even three times before investing their money,” Justin K. Jeffris, an associate director of Atlanta’s regional office, said in a statement.
The company represents that it “cooperates with the federal authorities as part of the efforts to carry out a tidy business end.” SEC said Frost and its companies have agreed to the actions of the implementation of SEC “with cash remedies that must be determined by the court on a later date.”
While SEC says there were loans for companies, 90% of these companies are overdue. By 2021, the company was running as a scheme of Ponzi, the complaint said, even when Frost withdrew the increasing amount of money.
The business is being investigated by Georgia’s Secretary of State for possible violations of the Securities Act, said Robert Sinars, an office spokesman.
A document of 2023 received by the AP is entitled as a “order order”, and sinners stated that anyone who issued an order order should be registered with Georgia Securities officials.
Sinners encouraged all victims to contact the State Securities Department.
Federal prosecutors refused to comment on whether they were considering criminal charges. Sometimes both the SEC civil case and the federal criminal case are filed for investment fraud.
Frost has been an important player in Georgia’s 1988 policy when coordinating Televangelist Pat Robertson the Republican presidential offer in the state. His son, Brant Frost V, is chairman of the Republican Party of Coweta County, where the company is based and is a former second deputy chairman of the State Republican Party. Daughter Katie Frost is the Republican Chairman of the 3rd Congress County, which includes Coweta County and other southwest areas of Atlanta.
Last month, the State Republican Convention, Katie Frost, chaired a nominating committee that recommended the chairman of the delegates to re -elevate the State Party Josh McCon. The delegates followed this recommendation, rejecting a number of rebels.