ATLANTA — A Republican activist and former employee of a family-run financial firm accused of bilking mostly conservative investors out of millions of dollars could face criminal prosecution after the Georgia Secretary of State’s office referred his case to a local prosecutor Wednesday.
Edwin Brant Frost V, former chairman of the Coweta County Republican Party, was also fined $500,000 by the state agency in connection with his alleged actions at First Liberty Building & Loan.
Frost is the son of the firm’s founder, Edwin Brant Frost IV.
“First Liberty misappropriated investors’ funds by failing to use investor funds as it represented to investors,” said the order issued by an assistant commissioner for Secretary of State Brad Raffensperger.
The agency referred its investigative file for potential prosecution to the Coweta County district attorney and sent it to the Georgia Office of the Commissioner of Insurance and Safety Fire, where Frost V holds an insurance agent license, according to the order.
Frost V’s lawyer, Christopher J. Huber, said his client denies the allegations.
“The Secretary of State did not provide him an opportunity to address his baseless accusations before rushing to judgment and to the press,” Huber said by email.
The Coweta district attorney’s office had no immediate comment. The insurance commissioner’s office did not immediately respond to queries about the case.
Frost V is accused of interacting with investors without the required registrations as a broker dealer agent and as an investment adviser representative. The secretary of state’s order also said he failed to disclose risk to investors and made unsuitable recommendations while personally profiting by investing in loan agreements that he then solicited to investors.
The order said he received $47,000 in bonuses and $88,000 in commissions and was receiving $4,000 a month from First Liberty by November 2023.
The U.S. Securities and Exchange Commission accused First Liberty of operating a Ponzi scheme with investor funds, saying in a lawsuit last year that the company and Frost IV had raised at least $140 million from about 300 investors, funneling at least $5 million to the family and more than $570,000 to political contributions.
Raffensperger, who is seeking the Republican nomination for governor, last year called on recipients to return campaign contributions from First Liberty and the Frost family.