The Securities and Exchange Commission has filed civil charges against Edwin Brant Frost IV and First Liberty Building & Loan LLC, alleging a Ponzi scheme that defrauded approximately 300 investors of more than $140 million. The complaint describes a multi-year fraud in which Frost represented First Liberty as a legitimate private lender offering secured real estate loans with steady interest income.
What happened
Frost allegedly told investors that First Liberty Building & Loan made short-term real estate construction loans backed by property deeds of trust. He promised annual returns ranging from 8 percent to 12 percent, paid quarterly. Investors received promissory notes and loan agreements that appeared professionally drafted. The SEC alleges the loans were largely fictional. Instead of funding construction projects, Frost used incoming investor capital to pay earlier investors and support his personal spending.
The scheme operated from approximately 2019 through early 2025. During that time, Frost allegedly raised more than $140 million from individuals, family offices, and small institutional investors across the southeastern United States. When redemption requests surged in late 2024, Frost allegedly began stalling investors with excuses tied to market conditions and title delays. By early 2025, payments stopped entirely.
Key facts
| Defendant | Edwin Brant Frost IV |
| Firm | First Liberty Building & Loan LLC |
| Scheme type | Ponzi scheme (alleged) |
| Total raised | ~$140 million+ |
| Investors affected | ~300 |
| Promised returns | 8% to 12% annually |
| Time period | ~2019 to early 2025 |
| Primary region | Southeastern United States |
The scheme structure
Frost marketed First Liberty as a conservative alternative to volatile stock market investments. He emphasized that each investor held a secured position backed by real property. The SEC complaint alleges these security interests were either nonexistent or severely impaired. Many of the properties allegedly pledged as collateral were either overvalued, already encumbered by other liens, or not actually owned by Frost’s borrowers.
Quarterly interest payments were the primary tool Frost used to maintain investor confidence. Those payments appeared reliable for years, which encouraged reinvestment and referrals. The SEC describes this as a textbook Ponzi dynamic in which consistent returns, rather than underlying business performance, kept the fraud operating.
What investors lost
The SEC estimates that investor losses exceed $140 million, though the final figure may grow as the receiver completes a full accounting. Many victims were retirees who liquidated brokerage accounts and certificates of deposit to participate. Some investors consolidated retirement assets into Frost’s notes, believing they had found a low-risk income source. The SEC’s complaint notes that Frost specifically targeted individuals nearing retirement with marketing materials that contrasted his “safe” returns with stock market volatility.
Warning signs investors missed
First Liberty operated without the regulatory oversight typically associated with lending institutions. It was not a bank or credit union, yet its name suggested otherwise. Investors did not receive audited financial statements or independent appraisals of the underlying collateral. Returns remained unchanged during the 2022 interest rate hiking cycle, a period when legitimate real estate lenders faced significant margin compression. Frost also discouraged investors from seeking outside financial advice, framing the opportunity as exclusive and time-sensitive.
What affected investors can do now
Investors should immediately preserve all account statements, wire confirmations, promissory notes, and correspondence with Frost or First Liberty representatives. The SEC has appointed a receiver to marshal and distribute remaining assets. Victims may also consider private arbitration or litigation if they suffered losses through a broker or investment adviser who recommended the investment. State securities regulators in Alabama, Georgia, and Florida have opened parallel investigations, which may yield additional recovery avenues.
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 Ponzi scheme recovery 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
- Visit htattorneys.com 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.
The information in this article is for educational purposes and does not constitute legal advice. Investors should consult a qualified securities attorney regarding their specific circumstances.
