The Securities and Exchange Commission has charged Chattanooga accountants Paul Thomas Croft and Jonathan David Frost with running a $64 million offering fraud. The complaint alleges investor money was steered into their own accounting firm, luxury cars, and Ponzi-style payments to earlier participants.
The SEC’s complaint, filed September 11, 2026, in the U.S. District Court for the Eastern District of Tennessee, also names Matthew William Dira, a salesperson who allegedly kept selling long after internal warnings surfaced. The three men raised approximately $64 million from more than 230 investors through promissory notes and limited liability company membership interests.
What happened in the Croft and Frost case
Croft and Frost jointly owned Croft & Frost, PLLC, a Chattanooga, Tennessee accounting and tax preparation firm. Starting in December 2022, the pair sold promissory notes and membership interests across a web of investment funds, according to the SEC. The scheme collapsed in September 2023.
By the time the operation unraveled, Croft and Frost owed investors approximately $53 million. The regulator alleges that at least $53 million of the $64 million raised never reached its stated purpose.
Key facts in the SEC complaint
| Metric | Figure |
|---|---|
| Total raised from investors | $64 million |
| Number of investors | More than 230 |
| Funds diverted, per the SEC | At least $53 million |
| Transferred to Croft & Frost, PLLC | About $33 million |
| Personal spending by the defendants | About $11 million |
| Ponzi-style payments to earlier investors | About $10 million |
| Average raised per investor | Roughly $278,000 |
The personal spending included a Maserati, a Ferrari, and residences in Chicago and Miami, according to the complaint. Credit card bills covered custom suits, jewelry, private flights, and yacht charters.
How the Croft and Frost funds operated
Between December 2022 and July 2023, the two men raised more than $8.7 million from over 50 investors across four funds marketed under the ROI Funds name. Investor money was supposed to help finance a power plant through an entity called Rhino Onward, the SEC alleges.
Rhino Onward never took substantial steps toward constructing a power plant. Croft and Frost held signature authority over the fund bank accounts, and investors were never given a real opportunity to vote on fund business.
The salesperson who kept selling
Dira worked for Croft & Frost, PLLC as a securities salesperson and administrator. The SEC alleges he continued selling promissory notes even after receiving emails in September 2022 warning that Croft and Frost were likely running a Ponzi scheme.
He earned more than $500,000 in salary and commissions while the warnings piled up. The complaint charges Dira with selling securities without the required registration.
Criminal case runs in parallel
Frost has already pleaded guilty to criminal fraud and money laundering charges in a parallel prosecution, United States v. Jonathan D. Frost, No. 1:26-cr-00004-TRM-CHS. In the civil case, Frost consented to a judgment that would permanently enjoin him and order disgorgement, interest, and civil penalties in amounts the court will set later.
Red flags investors can learn from
- Promissory notes promising steady returns sold by an accounting firm rather than a registered broker-dealer
- Fund money flowing back to the promoters’ own payroll, commissions, and loan payments
- No investor votes and little account transparency
- Sellers continuing to raise money after internal fraud warnings
- Luxury spending on cars, jewelry, and travel instead of the stated project
What affected investors can do now
Investors who bought notes or membership interests from Croft, Frost, or Dira should gather every record they hold. Trade confirmations, fund statements, emails, and wire receipts will matter in any recovery process.
The SEC case, announced in Litigation Release No. 26638, will move toward judgment in the Eastern District of Tennessee. Court-supervised recovery processes may follow, and filing deadlines can arrive within months. A common mistake victims make is waiting for the criminal case to finish before preserving their own records.
Haselkorn & Thibaut fights for investor recovery
Haselkorn & Thibaut is a securities law firm founded by former Wall Street defense attorneys who shifted their practice to represent investors. The firm has recovered over $520 million for clients in securities matters and maintains a 98 percent success rate in resolved nontraded REIT cases. Attorneys are AV Preeminent rated through Martindale-Hubbell, designated as Super Lawyers, and hold a 5.0-star client review average. The firm operates on a contingency basis — no recovery, no fee.
Contact Haselkorn & Thibaut today
Time matters in offering fraud cases. The earlier you act, the stronger your position. The firm offers a free case evaluation to assess your losses, review your account history, and explain your options under arbitration or settlement.
- Main Phone: 1-888-885-7162
- website for a free consultation
Offices in Florida, New York, Arizona, Texas, and North Carolina. Former Wall Street defense attorneys with 95+ years of combined experience. No recovery, no fee.
This article is provided for general informational purposes and does not constitute legal or investment advice. Investors should consult a qualified professional about their specific circumstances.
