Georgia’s top election official Monday called on candidates and political committees to return contributions from a scandal-ridden financial firm and its owners.
Secretary of State Brad Raffensperger made the request after the U.S. Securities and Exchange Commission accused First Liberty Building & Loan of defrauding about 300 investors of at least $140 million. The SEC says the organization made false promises of big returns but used their money for personal use, for political contributions and to repay other investors.
“Now is the time for every elected official, candidate or political action committee who received financial support from this entity currently under investigation to stand up and help the victims,” Raffensperger said in a statement released Monday. “Ill-gotten gains do not belong in the State Capitol.”
Newnan-based First Liberty advertised itself on conservative media as a patriotic, Christian financial organization. Its founder, Brant Frost IV, and his family are significant players in Georgia Republican politics.
According to a lawsuit filed by the SEC, from 2014 through this year, the firm sold promissory notes and loan participation agreements, offering investors returns of up to 18%. First Liberty said it would use investors’ money to make short-term bridge loans to businesses at relatively high interest rates.
The SEC said most of the loans defaulted. Since at least 2021, First Liberty used new investor funds to pay existing investors, operating a Ponzi scheme, the agency said.
The agency also said Frost used investor money to pay himself and relatives more than $5 million. Among other things, he allegedly spent $230,000 on family vacations, paid $335,000 to a rare coin dealer and made more than $570,000 in political donations.
First Liberty ceased operations this month. Frost has said he takes “full responsibility for my actions and am resolved to spend the rest of my life trying to repay as much as I can to the many people I misled and let down.”
Campaign contributions by Frost and First Liberty have gained attention in the wake of the firm’s collapse. The Democratic Party of Georgia chair has called on candidates to return such contributions. He accused recipients of benefiting from “money defrauded from unsuspecting donors.”
Former Republican state Rep. Scot Turner has also said there’s a “massive stain” on anyone connected to the contributions.
Raffensperger is the highest-ranking Republican making an issue of the contributions. He called on recipients to “return those contributions to the court-appointed receiver so that victims of the alleged fraud may be made whole.”
Among those who might return contributions: Raffensperger himself. Campaign records filed with the Georgia Ethics Commission show the secretary received at least $7,500 from the Frost family in 2018.
A spokesperson for Raffensperger’s campaign said he plans to return the contributions.
The secretary also urged anyone who has done business with First Liberty and suffered losses to file a complaint with his office.
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