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ATLANTA (AP) — A notable figure in Georgia’s Republican circles, Edwin Brant Frost IV, faces a serious legal battle as federal prosecutors have charged him with wire fraud. The accusation stems from his alleged involvement in orchestrating a $156 million Ponzi scheme. On Thursday, Frost made his initial court appearance, where he entered a plea of not guilty.
This charge marks the first criminal accusation arising from an ongoing investigation into the collapse of First Liberty Building and Loan last June. Frost appeared in court, waiving his right to an indictment before pleading not guilty—a move often seen as a precursor to a potential plea agreement in the federal judiciary system. Despite the severity of the charges, Frost remains free on bail and has previously issued a public apology for his actions.
The wire fraud charge could result in a prison sentence of up to 20 years. However, the ultimate sentence will likely be influenced by the court’s determination of the financial damage caused by the scheme. While First Liberty reportedly collected $156 million, the actual financial loss is estimated to be at least $65 million, as some investors did receive partial repayments.
Prosecutor Hertzberg has indicated that the government may seek a sentence for Frost that approaches the upper limit of the 20-year range. Frost, who is 68 years old and hails from Newnan, Georgia, finds himself at the center of a case that has captured significant attention due to its scale and the involvement of a political figure.
Hertzberg said prosecutors intend to recommend a sentence close to the top of the 20-year range for Frost, a 68-year-old Newnan man.
“The loss here is very significant,” he said.
First Liberty said it was in the business of taking investor funds and making short-term, high-interest loans to businesses, paying investors up to 18% annual interest. While First Liberty did make loans to businesses, prosecutors allege Frost used new investors’ money to pay previous investors, the definition of a Ponzi scheme. Prosecutors also claim Frost skimmed more than $5 million of investors’ money to finance his own lifestyle. That includes spending more than $140,000 on jewelry and more than $230,000 to rent a vacation home over multiple years in Kennebunkport, Maine, the town where the family of late president George H. W. Bush famously spent summers. Prosecutors say Frost also spent more than $2 million on credit card bills.
The U.S. Securities and Exchange Commission filed a lawsuit last year against the company and Frost. Some investors had complained that criminal charges had been slow to materialize, but Hertzberg said his office has been building a case, and that because Frost is willing to plead guilty, punishment will come quickly now.
“We were operating in the background, and we’ve now come out of the shadows to ensure that Mr. Frost faces full consequences for his actions,” Hertzberg said, praising investigations by the SEC and Georgia Secretary of State Brad Raffensperger’s office.
Among those who lost money were a company run by former Georgia GOP Chairman David Shafer; Alabama state Auditor Andrew Sorrell; and a political action committee controlled by the Republican Sorrell. Party activists have said many grassroots Republicans also lost money, while others were lured by ads on shows hosted by conservatives including Erick Erickson, Hugh Hewitt and Charlie Kirk.
Georgia Secretary of State Brad Raffensperger’s office has levied $500,000 civil fines against three people his office says helped solicit money for First Liberty and asked state prosecutors to consider criminal charges against them.
A federal judge appointed a receiver who is also trying to get money back for investors. The receiver had $5.16 million in cash as of March 23, and was trying to recoup money from nearly 30 unpaid loans by First Liberty.