Inside the Republican $140 Million First Liberty Ponzi Scheme

A “Main Street” Lender Built on a Mountain of Lies

First Liberty Building & Loan claimed to serve “Main Street business needs with Wall Street creativity.” The pitch was wholesome and patriotic: invest your savings, the company lends it to small businesses trying to get SBA loans, everyone wins. That pitch was completely fabricated.

Between 2014 and June 2025, Frost solicited at least 300 investors through loan participation agreements and promissory notes that promised annual returns of 8% to 18%. He started with “friends and family,” then in 2024 expanded to radio advertising, internet podcasts, and a public website. The operation looked legitimate from the outside. Inside, it was rotting from the start.

The SEC’s complaint, filed July 10, 2025, lays out in clinical detail how Frost kept the illusion alive: he made monthly interest payments to investors, even as the underlying loans collapsed, by funneling fresh investor money directly to old investors. That is the definition of a Ponzi scheme.

The “Friends and Family” Trap

Frost built trust first among people who knew him. The “friends and family” program offered returns between 14% to 18% per year, with investments tied to specific named bridge loans. Frost would hand over details: the borrower’s name, the loan amount, the expected closing date, what the money was supposedly for. It felt personal. It felt secure. It was theater.

When Frost took his scheme public in 2024, he launched a broader promissory note program with returns of 8% to 13%, with investment tiers starting at $25,000. He advertised it on radio and through podcasts. The public offering added hundreds of new victims into a structure that had already been mathematically insolvent for years.

Both programs promised the same thing: your money funds small business loans, borrowers repay those loans, you get your principal back plus interest. The SEC states flatly: those representations were false.

The Collapse Was Visible From 2019. Frost Kept Selling.

By the end of 2019, even if every single bridge loan was performing perfectly, First Liberty could generate at most $180,000 (about what three median American households earn in a year combined) in revenue from the spread between what borrowers paid and what investors were owed. That year alone, the company burned through $118,000 on credit cards, leaving $65,000 to cover every other operating cost.

In 2020, credit card expenses ballooned to $234,000. By 2021, payroll alone exceeded the company’s maximum possible revenue by nearly $200,000, and credit card charges hit $313,000. The total deficit that year surpassed $500,000 (enough to fully fund a small-town school’s annual supply budget). The math was screaming. Frost kept his mouth shut and kept selling.

In August 2022, the situation got dramatically worse: a single borrower holding $6.2 million in outstanding bridge loans filed for bankruptcy and stopped making interest payments entirely. The logical response to a $6.2 million bankruptcy would be to stop lending to that borrower. Frost’s response was to raise another $6.5 million from investors in December 2022 and funnel it toward a fifth loan to the same bankrupt borrower.

80% of “Returns” Were Stolen From Future Investors

By 2021, the SEC found that approximately 80% of all interest and principal payments to investors were sourced from newly raised investor funds, not from actual loan repayments. Every investor receiving a monthly check was, unknowingly, cashing a check written by the next person Frost convinced to join. As of the filing date, the SEC alleges potentially 90% of all bridge loans are currently in default.

While this was happening, Frost was telling investors that First Liberty had experienced exactly one default, ever. He repeated this lie as recently as May 2025, weeks before the SEC filed its complaint.

The Non-Financial Ledger: What $140 Million Costs the People Who Trusted Him

There is a specific type of betrayal reserved for people who invest with someone they know, or someone they believe they know. The SEC complaint is careful and precise in its legal language, but between every numbered paragraph lives a real person who handed over real money, often savings they had spent decades accumulating, on the strength of a handshake and a promise from a man who was already lying to them.

Consider the investor the SEC describes in paragraphs 90 through 109. In 2019, this person invested $500,000 (roughly the total retirement savings of 10 median American workers) in connection with a bridge loan to a specific borrower. That loan was supposed to mature by May 2021. It did not. Instead of disclosing that the borrower had defaulted, Frost made three more loans to the same borrower, growing the total exposure to over $12 million, all without seeking this investor’s consent as required by the very contract they had signed. When the borrower finally filed for bankruptcy in August 2022, Frost did not even file a claim for the original $3.4 million loan. The investor who put up $500,000 of that loan effectively had their money erased without ever being told.

By May 2024, Frost came back to this same investor with a new pitch: put money into a loan for a company developing a healthcare app. The investor, still waiting on their $500,000 from 2019, asked about the status of their original investment. Frost told them the loan was scheduled to pay off in June and that he was “very confident that it will.” He added that the borrower was “up 20% year over year in net operating income” and that the refinancing partner was “very eager to get it done.” The investor trusted him. They invested another $200,000. Frost knew when he said every single one of those words that the borrower was in bankruptcy and that First Liberty had already filed a claim against them in bankruptcy court. He had known for almost two years.

The $570,000 in political donations made with investor money represents a specific category of outrage that goes beyond financial loss. Investors who handed over their savings believing they were funding small American businesses were instead funding political agendas they may have actively opposed. Every check written to a political cause from a First Liberty account was written with money that belonged to someone else, someone who never consented to their investment becoming a political contribution. The SEC complaint does not specify which candidates or causes received the money, but the amount, $570,000 (enough to fully fund a community health clinic for a year), was substantial enough to influence actual electoral outcomes, using stolen funds.

The “friends and family” framing of the original scheme is worth sitting with. Frost specifically cultivated a network of people who trusted him personally before he ever expanded to radio ads and podcasts. When a scheme begins with close relationships, the betrayal compounds across entire social networks. One investor tells a sibling. A sibling tells a neighbor. A neighbor tells a coworker. The damage radiates outward. The SEC identifies approximately 300 investors total, but the ripple effects of broken trust, strained family relationships, and the social shame of having recommended a scam to someone you love are uncountable losses that never appear in any complaint or settlement figure.

As recently as June 2025, just weeks before the SEC filed its complaint, Frost was still on the phone with investors telling them that First Liberty’s cash flow and resources were “sufficient to repay the loan if necessary.” At that exact moment, the company’s bank accounts held $2,668,045.06. The total investor exposure was at least $140 million (enough to pay the annual rent for 3,700 American families). Frost was staring at a nearly empty tank and calling it a full one.

Legal Receipts: The SEC’s Most Damning Allegations, Word for Word

These passages come directly from the SEC complaint filed July 10, 2025. Read them slowly.

“Most, if not all, of the funds raised through the publicly advertised offering were either misappropriated or used to make Ponzi-style payments to existing investors.” SEC Complaint, Paragraph 14

“Frost told some investors, including one as recently as May 2025, that First Liberty had only ever had one Bridge Loan default. As recently as May 2025, when selling an investment, Frost told an investor that when the one Bridge Loan defaulted, First Liberty paid investors back with its own funds. In reality, the default rates were significantly higher. Indeed, potentially 90% of the Bridge Loans are currently in default.” SEC Complaint, Paragraphs 81–84

“Frost told the investor that the First Loan was scheduled to pay off in June and that he was ‘very confident that it will.’ Frost also told the investor that the borrower was ‘up 20% YoY [year over year] in NOI [net operating income], and our lending partner who is refinancing this for us is very eager to get it done.’ Relying on Frost’s representations about the status of his $500,000 investment, the investor made an investment of $200,000 in a loan to First Liberty. Frost knew his statements to the investor about the First Loan were false when he made them.” SEC Complaint, Paragraphs 100–103

“Significantly, nine days after being interviewed by Commission staff, Frost withdrew $100,000 from company accounts containing investor funds. Very recently, Frost also has been making large purchases at companies that sell high value and easily concealable assets.” SEC Complaint, Paragraphs 136–137

“As recently as June 2025, Frost was soliciting investments in a $3.5 million loan and telling investors that First Liberty’s cashflow and resources were sufficient to repay the loan if necessary. This statement was false. As of May 30, 2025, the balance in First Liberty’s accounts was only $2,668,045.06.” SEC Complaint, Paragraphs 116–118

Societal Impact Mapping

Economic Inequality: How Fraud Flows Upward

The structure of this scheme followed a pattern as old as financial fraud itself: ordinary people with savings were systematically transferred wealth upward to a single wealthy operator and his network of shell companies. The $140 million (enough to give every resident of a mid-sized American city a $1,000 emergency fund) flowed in one direction, from working people who were trying to grow modest retirement savings and small business capital, toward Frost’s personal accounts, his family, and a web of LLCs that the SEC says returned nothing of value.

The “friends and family” entry point of the scheme is a textbook mechanism for targeting the financial middle class. These are the people who have managed to accumulate some savings, who are not wealthy enough to access professional investment advisors, and who rely on social trust networks to vet financial opportunities. Frost weaponized that trust. He built credibility by paying early investors real returns, then used that credibility to pull in more capital as the underlying business collapsed beneath him.

The political donation angle adds another dimension to the inequality calculus. Frost spent $570,000 (equivalent to the total annual wages of approximately 13 minimum-wage workers) of investor money on political causes, meaning that stolen savings from ordinary Americans were converted into political influence without those Americans’ knowledge or consent. Wealth inequality does not just manifest in who has money; it manifests in who has the political power that money buys. Frost spent other people’s money to buy both.

The network of shell companies, First Liberty Capital Partners, First National Investments, MyHealthAI Capital, The Legacy Advisory Group, and The Liberty Group, collectively absorbed tens of millions in investor funds while providing zero documented value in return. The Liberty Group alone received $8.3 million (more than most Americans will earn in a lifetime of full-time work). These entities existed, in the SEC’s framing, to launder the appearance of legitimate business activity while funneling money away from investors who would never see it again.

Public Health: The MyHealthAI Angle and the Weaponization of Hope

One of the most cynical chapters in this story involves MyHealthAI Capital LLC. The SEC complaint reveals that Frost formed this entity in April 2025, just months before the scheme collapsed, specifically “to house health artificial intelligence investment transactions from First Liberty investors.” He transferred investor funds into it immediately. The company shared the same post office address as First Liberty.

The healthcare AI industry is one of the most emotionally charged investment narratives of the current moment. Ordinary people desperately want to believe that technology will solve the American healthcare crisis. Frost packaged that hope as an investment vehicle and used it to extract more money from people who were already his victims. The SEC complaint describes how Frost offered one specific investor, the same person owed $500,000 from the 2019 loan, the opportunity to invest in a company developing a healthcare app. That investor put in another $200,000 on the strength of Frost’s lies.

Directing investor funds into a health tech shell company that was formed two months before the scheme’s exposure, and that shared a P.O. box with a Ponzi operation, raises serious questions about what those funds were actually intended to accomplish. The SEC includes MyHealthAI Capital among the relief defendants, meaning the government wants the money that passed through it returned. The human cost is the false promise: people who gave money to “healthcare AI” gave it to nothing.

Here is a press release on the SEC website about this Ponzi scheme fraud: https://www.sec.gov/newsroom/press-releases/2025-98-sec-charges-georgia-based-first-liberty-building-loan-its-owner-operating-140-million-ponzi-scheme

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