How an alleged Georgia Ponzi scheme fueled far-right causes

That network of political largesse is now under the microscope. The U.S. Securities and Exchange Commission accused Frost IV and his Newnan-based firm, First Liberty Building & Loan, of orchestrating a $140 million Ponzi scheme — and funneling more than $570,000 of the proceeds into campaign coffers.

The AJC scoured state and federal campaign data from across the U.S. and found hundreds of thousands of dollars in additional contributions from the Frost family and their companies that show a broader pattern of political giving that sought to shape Georgia GOP politics, and served and bankrolled ultraconservative causes around the nation.

It’s not clear which contributions were paid with investors’ money. But the SEC says Frost and First Liberty spent $572,800 in investor funds on political contributions.

The AJC identified contributions from Frost IV; his wife, Krista; his son, Brant Frost V, a former vice chair of the Georgia GOP and a principal at First Liberty; his daughter, Katie Frost, who chairs the party’s 3rd District committee and was also involved in First Liberty; and other relatives who listed the family’s Newnan addresses on contributions.

They also include contributions made through Frost-owned First Liberty, First National Investments and The Liberty Group.

The donations often favored staunchly conservative causes and candidates. The top recipients included the Georgia Republican Assembly, a far-right faction that took in more than $162,000; and the Georgia Republican Party, which received more than $50,000.

But Frost money also flowed to some of Georgia’s most prominent political figures. Among them: Gov. Brian Kemp ($13,800); Secretary of State Brad Raffensperger ($8,417); and Lt. Gov. Burt Jones ($1,000).

The AJC analysis shows the Frosts and their companies contributed to at least 215 candidates and committees in 38 states since 2002 — and ramped up their contributions in 2022, around the time the SEC said Frost started a Ponzi scheme that defrauded investors.

That money helped propel the Frost family to prominence in grassroots Republican politics, where Brant Frost IV’s children emerged as influential party figures. It fueled their crusade against the GOP establishment and boosted right-wing candidates in Georgia and beyond.

Frost IV leveraged his political views and clout to build up First Liberty. He pitched the company to investors on conservative outlets as a way to support a Christian-centered “patriot economy.”

Frost IV didn’t return multiple requests for comments, though he told the AJC in a statement that 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.”

He is the only person named in the SEC complaint.

Frost IV also urged investors in his firm to give a federally appointed receiver, S. Gregory Hays, “time to sort things out and do his best to repair the damage I created” as he tries to recoup money.

Pressure has been growing for the recipients of Frost campaign contributions to return them to help First Liberty investors who lost money. This week, some elected officials said they’ve done so.

Raffensperger returned his contributions and encouraged other candidates, parties and political committees to do the same.

“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, adding that “ill-gotten gains do not belong in the State Capitol.”

Top recipients

The AJC analysis identified nearly 1,000 contributions dating to 2002. But nearly 83% — or $1.1 million — was given since 2021. That’s about the time when the SEC says First Liberty began operating as a Ponzi scheme — using new investors’ money to cover payments to existing investors.

The contributions came as the Frost family intensified its efforts to push the Republican Party to the right.

The family played a key role in the rise of the Georgia Republican Assembly, which shared an address with First Liberty. Brant Frost V served as chairman and treasurer. State records show Frost contributions accounted for about 40% of the political committee’s income since it was founded in 2017.

The Georgia Republican Assembly fought to prevent Republican “traitors” it deemed insufficiently conservative from running in the party’s primary elections, efforts that are still pending in the court. And it rebuked GOP establishment figures such as Raffensperger.

But last month the group splintered amid disputes about its approach. The Frosts were among those who parted ways with the political committee. The group’s PAC shut down at the end of June.

Even as they targeted the GOP establishment, the Frosts sought to influence it. The family made about 160 small donations — ranging from $10 to $500 — to the Georgia Republican Party, plus a couple dozen larger contributions. They added up to more than $50,000 over the years, making the party the Frosts’ second-largest beneficiary in Georgia.

The family also sought to influence politics beyond Georgia. They spent significant sums on conservative candidates and causes in Alabama ($155,000); Maine ($138,000); Florida ($68,000); and West Virginia ($35,000).

The Frosts contributed $55,000 to Justin Andrew Sorrell, the Alabama state auditor and former legislator who is running for secretary of state next year. Sorrell is the top individual recipient of Frost family contributions, the AJC found.

In a statement to the AJC, Sorrell said he was among the hundreds of investors who lost money when First Liberty closed. Nonetheless, he plans to return his Frost campaign contribution.

“It’s important that all recovered money goes back to the investors so everyone can be made whole rather than to the individual who defrauded us,” Sorrell said.

Other top individual recipients include West Virginia Gov. Patrick Morrisey and his political committee ($35,000); Alabama Board of Education member Allen Long ($40,000); and former Georgia Labor Commissioner Bruce Thompson ($28,000), who died last November.

The review shows a pattern of contributions by the Frosts to fringe conservatives, some waging long-shot campaigns on controversial platforms.

Kandiss Taylor used her losing campaign for governor in 2022 to promote false conspiracy theories that state GOP leaders were secret Communists, Democrats were satanic pedophiles and Donald Trump won the 2020 election.

Shortly after Taylor announced a U.S. House bid earlier this year, Frost’s wife, Krista, contributed $3,500 to her bid. She is one of only about a half-dozen donors in Taylor’s recent disclosure.

“I’m focused on running a campaign and raising money,” Taylor told the AJC. “If the FEC gives me direction to return a donation, I will follow their direction.”

The Frosts also contributed thousands of dollars to members of the Freedom Caucus, which promised to be a powerful voice for conservative legislation — and a thorn in the side of more mainstream GOP leaders.

That includes nearly $28,000 for state Sen. Colton Moore, an ultra conservative Republican who was ousted from the Senate GOP caucus and banned from the House floor for bruising attacks against fellow Republicans.

Moore didn’t return repeated requests for comment.

Pressure to return money

The SEC’s allegations have sparked a debate among Georgia Republicans who accepted their money.

Some indicated they will keep the cash, though several declined to speak on the record. They pointed to politicians who held onto donations from cryptocurrency mogul Sam Bankman-Fried, who spent tens of millions of dollars supporting both parties in 2022 and is now serving a 25-year sentence for fraud.

Others are preparing to return the Frost contributions. Several said they are awaiting instructions from Hays, who told the AJC that recouping political donations is a top priority.

State Sen. Greg Dolezal said he’s already refunded a $3,300 contribution from the Georgia Republican Assembly PAC, following guidance from the federal receiver.

Public Service Commissioner Fitz Johnson, who is up for election in November, plans to return a $1,000 donation from the PAC. Aides to Kemp and other senior Republicans say they’re consulting with their attorneys on how to handle the donations.

Some are calling for swift action. Former Republican state Rep. Lauren Daniel from Henry County now a candidate for the Georgia Senate, said the issue is bigger than politics.

“They were doing things that were evil,” said Daniel, who has clashed with the Frosts in the past. “Any candidates who received money from them should absolutely work with authorities to help make victims whole to any extent possible.”