ATLANTA — Edwin Brant Frost IV faces a long stretch in prison and a demand to repay millions of dollars to investors after he pleaded guilty in federal court to wire fraud in connection with what prosecutors called a “classic” Ponzi scheme.
The plea agreement signed Tuesday by Frost, the former owner and president of the defunct First Liberty Building and Loan, estimated the loss at somewhere between $65 million and $150 million.
“The Defendant agrees to pay full restitution, plus applicable interest” to the victims, said the document, which Frost signed in court before U.S. District Judge Leigh Martin May of the Northern District of Georgia.
Assistant U.S. Attorneys Angela Adams and Samir Kaushal handled the case, and are recommending 14 years in prison. The maximum for the crime is 20 years.
U.S. Attorney Theodore S. Hertzberg and Adams filed a wire fraud charge against Frost on April 23. They alleged that he violated the law when he wired money between First Liberty accounts in November 2023, well after the company was underwater financially.
By 2021, the court document said, First Liberty had ceased generating enough revenue to pay the interest it owed investors, so Frost recruited new investors and used their money to pay the interest.
Frost went on to raise at least $140 million from at least 300 investors, the court record said, and paid himself and his family over $5 million. Examples given of his use of investor money included $230,000 to rent a vacation home in Maine, $140,000 on jewelry and $2 million on credit card bills.
Frost also used investor funds to make $570,000 in political contributions, the prosecutors wrote.
Frost and his family were major donors to Republicans. His son, Brant Frost V, was chairman of the Coweta County Republican Party.
In July, after the federal Securities and Exchange Commission sued First Liberty alleging it had operated as a Ponzi scheme while donating money to political campaigns, Georgia Secretary of State Brad Raffensperger asked recipients to return any contributions.
Later that month, state GOP Chairman Josh McKoon announced that his party had delivered $36,844.
Last month, Raffensperger said a bank associated with First Liberty had pledged to repay nearly $6.7 million to 46 investors.
As part of his plea deal, Frost agreed to cooperate with any further investigations or court proceedings. He is to be sentenced in Judge May’s courtroom in Newnan on Aug. 14.