First Liberty Founder Charged in $155M Ponzi Scheme

The former president of a Newnan-based lending firm accused of raising more than $155 million from investors was arraigned Thursday on a federal wire fraud charge tied to what prosecutors describe as a multi-year Ponzi scheme.

Edwin Brant Frost IV, 68, of Newnan, pleaded not guilty during a brief hearing before Chief U.S. Magistrate Judge Justin S. Anand. He was released on a $10,000 supervisory bond with travel restrictions and ordered not to contact potential witnesses or alleged victims.

Frost led First Liberty Building & Loan LLC, a now-defunct company that marketed short-term “bridge loans” to investors promising returns between 8% and 18%. Federal prosecutors allege those promises were built on misrepresentation.

According to the U.S. Attorney’s Office for the Northern District of Georgia, Frost told investors their money would fund short-term loans to small businesses in need of immediate capital. Instead, investigators say, new investor funds were used to pay earlier investors and sustain the appearance of a profitable operation.

“Frost abused the trust of his clients, family, and friends by allegedly soliciting investors with promises of sizable returns, while knowing the money raised would instead be used for his personal expenses and to pay early investors to maintain the illusion of profits,” said U.S. Attorney Theodore S. Hertzberg.

A court-appointed receiver has since estimated the total value of the alleged fraud at more than $155 million, increasing earlier public figures.

Authorities describe the operation as a “classic Ponzi scheme,” one that relied on a steady flow of new investments to cover mounting losses and obligations.

How the scheme worked

From at least 2021 through July 2025, Frost is accused of soliciting hundreds of investors with assurances that their funds would be tied directly to bridge loans. He also claimed investor returns would come from borrower repayments and associated loan fees.

But federal investigators say that was not the case.

Frost allegedly failed to disclose that some borrowers had already defaulted, while continuing to extend financing to at least one of those companies. As losses mounted, prosecutors say he relied increasingly on new investor money to cover obligations to earlier participants.

“Frost allegedly operated a classic Ponzi scheme—using new investor funds to pay earlier investors while concealing significant financial losses,” said Marlo Graham, Special Agent in Charge of FBI Atlanta.

By the time the operation unraveled, authorities say at least 300 investors had contributed a combined total now estimated to exceed $155 million.

Where the money went

Investigators also allege that more than $5 million in investor funds were diverted to personal and discretionary spending.

Among the expenditures cited in court filings:

• More than $230,000 to rent a vacation home in Maine
• More than $140,000 on jewelry
• $20,800 for a Patek Philippe watch
• More than $2 million in credit card payments
• More than $570,000 in political contributions

Federal officials say those expenses were never disclosed to investors, many of whom believed their funds were tied to secured, short-term business lending.

“The defendant in this case was charged today for allegedly orchestrating a multi-million-dollar Ponzi scheme that defrauded hundreds of investors,” said Kyle A. Myles, Special Agent in Charge of the FDIC Office of Inspector General’s Atlanta region.

Case shifts from civil to criminal

The federal charge marks an escalation from an earlier civil case filed by the U.S. Securities and Exchange Commission, which accused First Liberty of operating a Ponzi scheme after the business abruptly shut down in June 2025.

Frost waived indictment and was charged by criminal information, a process that often signals ongoing discussions between prosecutors and defense attorneys. In court, prosecutors said both sides are working to schedule a future hearing related to a potential change of plea.

“Mr. Frost is accepting responsibility and intending to resolve this,” said defense attorney Nicholas A. Lotito.

Hertzberg said the investigation remains ongoing and could result in additional charges.

“It doesn’t necessarily mean that Mr. Frost is providing information about other people,” Hertzberg said. “What it does mean is that he is prepared to accept responsibility for his wrongdoing and not contest the charges.”

Local ties, broader impact

First Liberty operated out of Newnan, placing the case squarely within Coweta County’s business community. The company marketed its investment products to a largely conservative audience, often using faith-based messaging to promote what it described as a “patriot economy.”

A court-appointed receiver has been working to recover funds for investors and reported earlier this year that millions have been recouped, though much of the money may never be recovered.

The FBI, FDIC Office of Inspector General, Securities and Exchange Commission, and the Georgia Secretary of State’s office all contributed to the investigation.

What comes next

Frost faces a single count of wire fraud, which carries a potential maximum sentence of 20 years in prison.

The case now moves forward in federal court, where prosecutors will seek to prove the allegations outlined in Thursday’s filing.

As with all criminal cases, officials emphasized that the charge is an allegation, and Frost is presumed innocent unless and until proven guilty or admits guilt in a court of law.

For investors and the local community, the proceedings are likely to bring further clarity — and potentially more questions — about how a company promising steady returns unraveled into one of the region’s largest alleged financial fraud cases.