**ATLANTA — Seven Months After $140 Million Ponzi Scheme Collapse, Investors Seek Accountability**
Seven months after the collapse of an alleged $140 million Ponzi scheme that implicated top ranks of Republican politics in Georgia and Alabama, many investors are growing impatient to recover their lost funds.
“I feel like we’re never going to see it, as old as we are,” said Thomas Todd, a 77-year-old retired business owner, during a meeting with Georgia Secretary of State Brad Raffensperger on Monday.
### Secretary of State Increases Anti-Fraud Efforts Amid Political Pressure
Raffensperger says his office is intensifying efforts to address the fallout, even as Republican state lawmakers push to transfer securities regulation to the Georgia Department of Banking and Finance. These lawmakers blame the Secretary of State’s securities division for failing to detect wrongdoing at First Liberty Building & Loan before its collapse.
Federal investigators have revealed that the company defrauded at least 300 investors out of a minimum of $140 million.
Raffensperger himself is running for governor, and his office’s anti-fraud performance could become a critical issue in the upcoming Republican primary this May.
### The First Liberty Scheme and Its Political Connections
Brant Frost IV, who led First Liberty, had decades of involvement in conservative politics. His company claimed to be a lender offering high-interest, short-term loans to businesses, promising investors up to 16% annual returns.
Promoting “Wall Street returns for Main Street investors,” a U.S. Securities and Exchange Commission (SEC) lawsuit alleges Frost personally stole $17 million, benefitting himself, relatives, and affiliated companies. Additionally, Frost loaned millions that borrowers failed to repay.
Notably, victims included entities linked to prominent Republicans such as former Georgia GOP Chairman David Shafer, Alabama State Auditor Andrew Sorrell, and a political action committee controlled by Sorrell. Party activists noted that many grassroots Republicans suffered losses, and others were drawn by advertisements aired on conservative-hosted shows like those of Erick Erickson, Hugh Hewitt, and Charlie Kirk.
### Ongoing Asset Recovery Efforts
A federal court appointed receiver Gregory Hays to recover money for investors. In a report dated January 30, Hays disclosed he is still consolidating information from 48,000 financial transactions. Some borrowers are resisting attempts to seize real estate and other collateral pledged to secure loans.
As of December 31, Hays reported $3.59 million in assets on hand. Since then, an auctioneer sold five luxury vehicles handed over by the Frost family, netting nearly $139,000. The receiver is also in the process of selling the First Liberty office in Newnan, an Atlanta suburb, for $581,000, though the property carries a $160,000 lien that must be cleared first. Additionally, Frost’s Patek Philippe watch fetched $10,000 at sale.
Hays has received over $300,000 from the return of more than 1,000 political donations made by the Frost family, which were funded with over $1 million of investor money. These donations frequently supported far-right Republican insurgents.
So far, Hays has spent $412,000 from investor funds on recovery efforts, cautioning that asset recovery “will be an expensive and protracted process.”
### Investor Frustration and Calls for Reform
Thomas Todd and other investors expressed deep regret during Monday’s meeting with Secretary Raffensperger. Todd revealed he lost $750,000 and that First Liberty collapsed just before he could invest additional funds. He was using the income from his investments to support Christian missions, describing it as “God’s money.”
“They were stealing it,” Todd said bluntly. “They knew they were stealing it. And they were working at stealing it, because they knew they were in trouble.”
In response, Raffensperger’s office recently named lawyer Jason Doss as an investigative agent. Raffensperger has proposed new state legislation that would empower his office to order fraudsters to make direct repayments to investors. Currently, his team can only pursue civil actions against perpetrators and share information with the receiver and prosecutors.
### Regulatory Debate and Political Fallout
It remains unclear whether federal prosecutors will bring charges. A spokesperson for Atlanta U.S. Attorney Theodore Hertzberg declined to comment on Monday.
Meanwhile, Georgia House lawmakers—who have received numerous complaints from defrauded Republicans—are advocating to shift securities regulation oversight to banking regulators. Assistant Commissioner of Securities Noula Zaharis told the House Banks and Banking Committee on Thursday that moving employees and responsibilities from Raffensperger’s office, as proposed in House Bill 934 set for July 1, could disrupt regulatory functions.
She also acknowledged the difficulty in detecting Ponzi schemes. “Schemes like this are set up to create an illusion and they are schemes that pay,” Zaharis said.
Despite these challenges, Republican lawmakers criticized her staff for failing to prevent First Liberty’s fraud.
“I just don’t really see a system or plan in place to preemptively identify these things and eliminate these bad actors before they get too far gone,” said Republican state Representative Carter Barrett of Cumming.
—
As the investigation and recovery process continues, many investors remain hopeful but wary about the prospect of reclaiming their losses in this high-profile political scandal.
https://abcnews.go.com/US/wireStory/investors-impatient-recover-140m-alleged-georgia-ponzi-scheme-130009823