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Coweta County District Attorney Herb Cranford confirmed Thursday that his office has received a criminal referral from the Georgia Secretary of State’s Office regarding Edwin Brant Frost V and is reviewing the matter.
“I am able to confirm that the Secretary of State’s Office has made a criminal referral to my office regarding Brant Frost V,” Cranford said in an email to The Citizen. “In response, I requested a copy of the Secretary of State’s case file to review. That is all I can say at this time.”
The Secretary of State’s Securities & Charities Division formally referred the matter “for potential criminal prosecution” under Rule 590-4-1-.10(2), according to the February 17 referral letter.
The referral follows Wednesday’s Emergency Order in which Secretary of State Brad Raffensperger barred Frost V from securities activity in Georgia and imposed a maximum $500,000 civil fine in connection with the collapse of First Liberty Building and Loan.
As previously reported, the SEC determined First Liberty operated as a Ponzi scheme out of their office in Newnan. Founder Brant Frost IV consented to judgment, and a court-appointed receiver is working to collect and liquidate assets in an effort to recover funds for investors.
Frost V worked for First Liberty during its operation and previously served as chairman of the Coweta County Republican Party before resigning late last year.
The Secretary of State’s 15-page Emergency Order concluded that Frost V sold unregistered securities, made material misrepresentations to investors, and failed to disclose conflicts of interest while soliciting approximately 90 investors.
A criminal referral does not automatically result in charges. The Coweta County District Attorney’s Office must independently review the Secretary of State’s investigative file and determine whether prosecution is warranted.
Based on a review of Georgia law, potential charges in cases involving unregistered securities sales and alleged investor misrepresentations can include securities fraud under the Georgia Uniform Securities Act, theft by taking under O.C.G.A. § 16-8-2, or other fraud-related offenses. In cases involving patterns of related financial misconduct, prosecutors can also consider racketeering statutes. The District Attorney has not indicated what, if any, specific charges may be considered in this case.
Several First Liberty investors have previously told The Citizen they believe criminal charges are appropriate. James McMaster, who publicly discussed his losses, previously said, “Hey, let’s get this guy put away.”
Another investor who lost her life savings to First Liberty, identified as Lou, said she was “very upset about it.” She added, “I think they all need to be prosecuted.”
No charges have been filed at this time.
Cranford did not provide a timeline for completion of the review.The Citizen will continue to follow developments as prosecutors evaluate the Secretary of State’s case file and determine next steps.
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