Richard Hortman was looking for a safe place to park some of his nest egg and earn a little extra interest when he came across First Liberty Building & Loan.
A self-described political junkie, the retiree from Carrollton said he saw the rural Georgia company’s ads all over conservative media. Hortman said the conservative political connections of the company’s founding family gave him some comfort. First Liberty and founder Brant Frost IV, he said, “had a great reputation.”
Hortman invested $200,000 in a First Liberty loan program in April and another $75,000 in June to get a higher rate of return.
“I got two interest checks,” Hortman said in an interview Wednesday. “I was looking for an interest check the first of the month, and it did not show up.”
Now investors like Hortman are wondering if they’re going to get their money back after the company shut its doors Friday. The company announced on its website that it had ceased all business operations, suspended investment programs and is cooperating with federal authorities for an “orderly wind-up of the business.”
Credit: arvin.temkar@ajc.com
Credit: arvin.temkar@ajc.com
It’s unclear which federal agency is involved or in what capacity. The U.S. Attorney’s Office in Atlanta and the Securities and Exchange Commission in Washington declined to comment earlier this week.
State regulators are also scrutinizing the firm. Secretary of State Brad Raffensperger’s office, which regulates securities statewide, told The Atlanta Journal-Constitution Tuesday it has opened a civil investigation and urged investors to contact regulators.
“I’m in shock,” said Hortman, who said he is seeking answers and has not heard from the company.
The downfall of First Liberty also sent shock waves through Georgia’s Republican infrastructure.
The Newnan-based firm’s president and founder, Brant Frost IV, and his children were deeply embedded in conservative politics, and the firm aggressively marketed to a GOP-friendly audience.
Promotional materials highlighted appearances on the “Hugh Hewitt Show” and advertisements on the “Erick Erickson Show.” Brant Frost V, the founder’s son and a company principal, often promoted the firm as a way for everyday investors to grow the “patriot economy.”
Credit: YouTube screen
Credit: YouTube screen
The company advertised conventional programs like Small Business Administration loans but also promised “creative financing solutions,” offering loans ranging from $250,000 to $20 million.
Its pitch: “We say yes when the big banks say no.”
First Liberty also offered investors the ability to buy into what it called “First Liberty Notes.” These were short-term and bridge loans made to businesses.
Hortman invested $200,000 in April after an initial meeting with Frost’s son, Brant Frost V, and another executive at First Liberty’s Newnan office.
Hortman said he was promised a 12% return on a 12-month investment, which First Liberty could extend by another 12 months. Hortman said First Liberty offered a rate of 13% if he could increase his total investment to $250,000.
In June, Hortman said he met the elder Frost and decided to invest the other $75,000. In the 30-minute conversation, they talked about their children and grandchildren as well as business.
“He’s just one of those grandfatherly types who soothed you over with confidence,” Hortman said.
While First Liberty acknowledged the risk in investing, “he told me they’d never lost any money for any of their investors,” Hortman said of the elder Frost.
Frost IV made a personal apology to some investors, reading from a prepared statement that said he was apologizing for his role and that federal authorities were shutting down his business, according to two people with direct knowledge of the conversations who spoke on the condition of anonymity.
Several members of the Frost family didn’t respond to repeated requests for comment. The company issued a blanket statement saying it would not “make any further communications at this time regarding the ongoing situation.”
Deep roots
While the Frost name wasn’t widely known outside political circles, the family has long helped pull the Georgia GOP toward the party’s more conservative flank. Brant Frost V is a former vice-chair of the state party and longtime chair of the Coweta GOP; his sister Katie Frost heads the state GOP’s 3rd District committee.
Until a recent rift, both were active in the Georgia Republican Assembly, a far-right faction that pushes for local party leaders to have the final say over which candidates can qualify as Republicans and engages in a perpetual war with the GOP establishment.
A political action committee aligned with the group, the GRA PAC, listed the same downtown Newnan address as First Liberty’s headquarters and “Brant Frost” as treasurer. The PAC reported raising more than $320,000 since 2022, with recent donations supporting Republican state Reps. Charlice Byrd of Woodstock and Noelle Kahaian of Henry County, and state Sens. Greg Dolezal of Alpharetta and Colton Moore of Trenton.
David Emadi, head of the state‘s ethics commission, said he’s aware of the state and federal scrutiny of First Liberty but couldn’t comment on “details of any active investigations our office is conducting at this time.”
This isn’t the first time First Liberty has faced legal scrutiny.
A 2013 federal lawsuit accused the firm of a “prolonged pattern of repetitive, gross misstatements, distortions and omissions of material fact” in order to secure a $450,000 investment in promissory notes. It was voluntarily dismissed a year later.
Legal experts now expect a drawn-out fight. Craig Kuglar, an attorney whose firm helped recover funds for victims of a Ponzi scheme involving an Atlanta area investment group called Horizon Private Equity, said he’s already investigating First Liberty’s collapse. He expects a federal lawsuit to follow.
“This situation is in the early stages, but investors should brace for the worst,” said Kuglar.
That’s haunting to Jordan Baldwin, a physical therapist from Sharpsburg who said he invested roughly $230,000 over three years in what he was told were “short-term bridge” loans.
The loans weren’t secured, and Baldwin said he knew there was some risk. But with 16% returns and steady interest payments early on, it seemed like a no-brainer.
Only recently did he spot red flags. Interest payments were delayed. And when he tried to withdraw his money, executives urged him to stay in.
He managed to recover $80,000 — but he’s still $150,000 in the hole.
“I know people that were in way more deeply than I am,” he said. “There are people with 10 times my loss.”
Baldwin said he’s had sleepless nights. He wants answers. Some investors he knows received personal calls from Frost IV apologizing for the financial collapse. He hasn’t heard from him — and isn’t sure it would matter.
“There’s a piece of me that wants a pound of flesh. But I also want to see the facts come out,” he said. “I want an apology, but it’s not sufficient. Maybe he thinks an apology will help his conscience. But I want answers.”
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