First Liberty’s Ponzi scheme: the perspective of a victim

First Liberty Building and Loan, a non-bank lending firm based in Newnan, abruptly collapsed on June 27, halting operations and freezing all investor payouts. The Securities and Exchange Commission (SEC) has estimated that First Liberty has defrauded roughly 300 investors of at least $140 million dollars.  This fallout has left all investors in limbo- among them, George*, a 72 year old man who lives in a county outside of The Citizen’s market and entrusted nearly his entire life savings from a career in sales to the firm. 

George invested $1,019,000 with First Liberty, after being drawn in by a promised 13% rate of return. Most of his communication throughout the process was with Jayme Sickert, the company’s director of compliance. Following our recent report on Sickert’s past involvement in potentially fraudulent schemes and civil settlements, George came forward to share his experience.

“We are freaking scared and don’t know what to do,” said George. “I’m going to fix it.”

George first heard about First Liberty through a commercial on The Erick Erickson Show, a conservative talk radio program on WSB Atlanta. Host Erick Erickson praised the firm as a pillar of the “Patriot economy”, a common phrase used throughout First Liberty’s marketing. Trusting the endorsement, George made a point of driving to Newnan multiple times earlier this year to meet with Sickert in person before committing his funds in February. 

At the time, George was receiving a 5% rate of return on his Individual Retirement Account (IRA). Sickert claimed he could get up to 13% if he invested more than 100,000 dollars. This was tempting for George, who saw investing in the firm as an opportunity for greater financial security for himself and his wife.

“If something happened to my wife, something happened to me, she could live on, I could live on,” said George. “Greed makes you do crazy things.”

Sickert backed up his claims by showing George visuals of clients reportedly earning  high returns. He also connected with George on a spiritual level-both men are members of the Presbyterian Church of America (PCA), and Sickert, who worked as a pastor, claimed to know George’s pastor as well.

Initially, George received interest payments, which he believes were meant to build trust before encouraging him to invest the remainder of his funds. He did so just six weeks ago. 

After the company’s sudden collapse, George had made calls to Sickert, still unaware of the full extent of the situation. Sickert responded via text: “I’m sorry, but I cannot communicate via phone or email.” The message alarmed George.

“Even his voicemail-he seemed pretty shaken. It wasn’t the same Jayme I talked to early on,” he said.

Concerned, George texted again: “I’m sorry. I hope all is well. I heard your voicemail and could sense something wasn’t right. Do we need to pray for you and your family?” He received no response to this message.

Then, on Wednesday night, after hearing reports about the collapse, George sent another message: “Jayme, Ellen* and I are brokenhearted after reading online what has happened. I hope we haven’t lost our savings. Where do we go from here? We just signed up and we trusted you. Please advise.”

Sickert replied the next day:

“I’m not supposed to respond, but you’re a friend. I was blindsided when the firm was shut down last Friday. Everyone lost their job, but I am not the target. I have been approved by the regulators and the lawyers to stay on and help unwind the mess. My goal is to help everyone get back the maximum possible amount.”

George responded with urgency:

“Jayme, I read everything I could last night. Well into the late evening online about it, and I consider you a fine Christian brother, but I need to get our funds returned as soon as possible as this is our life savings, and we have been devastated by the news. Please advise us as soon as possible, your friends in Christ, George and Ellen.”

He has not heard back since.

“I thought we had a good relationship,” said George. “We had a lot of lengthy discussions, biblical discussions, spiritual discussions, different things. By him even writing that, I think he truly did have some personal feelings towards us.  Otherwise, he wouldn’t have written anything back at all.”

Now, the SEC has announced on Thursday, July 11, that they have filed charges to freeze the firm’s assets and provide emergency relief against First Liberty and its founder, Edwin Brant Frost IV.  The SEC has declared First Liberty a Ponzi scheme, stating that since 2021 they have used new investor’s funds to pay out older investors. In doing so, First Liberty has violated the federal antifraud provisions with loans defaulting and funds being used for personal reasons. 

The personal uses of this money include at least $2.4 million in credit card payments, $335,000 to a rare coin dealer, and $230,000 on family vacations. The SEC will seek permanent injunctions and civil penalties against the defendants and a conduct-based injunction against Frost.

“The promise of a high rate of return on an investment is a red flag that should make all potential investors think twice or maybe even three times before investing their money,” said Justin C. Jeffries, Associate Director of Enforcement for the SEC’s Atlanta Regional Office in the SEC’s report. “Unfortunately, we’ve seen this movie before – bad actors luring investors with promises of seemingly over-generous returns – and it does not end well.”

George is beyond mortified about his decision, to the point where his own children are unaware of his investment and the amount he has lost. However, his embarrassment is not stopping him from looking for solutions to this problem. He has submitted a tip to the FBI and is exploring legal options, including the possibility of joining or leading a lawsuit- similar to those Sickert was tied to from his previous work in the investment industry. 

With the SEC hoping to provide relief, there may be hope for George and others who put funds into First Liberty, but for now they are left devastated and confused after this disheartening breach of trust.

*Names changed to respect the victims’ privacy.

Additional reporting by Ellie White-Stevens for this story.