SEC Charges Frost in $140M Ponzi Scheme

It’s hard to even know where to begin with this one.

During the most recent Peach Pundit the Podcast™ I made a commitment to PP readers and listeners that we would cover the Frost Scandal in depth as new details emerged.

Well, new details have emerged.

The U.S. Securities and Exchange Commission just nuked Brant Frost the IV from space in a new complaint. The SEC says Frost ran a Ponzi scheme so massive that it hauled in at least $140 million from unsuspecting investors, many of whom were simply trying to earn a little extra income on what they were told were safe, short-term loans.

You read that right. One hundred forty million dollars!

The SEC has alleged that for over a decade Frost and his company offered what they called “loan participation agreements” and promissory notes. They dangled returns as high as 18 percent per year. The pitch was simple. Investors were told their money would fund short-term bridge loans for small businesses waiting on SBA-backed financing.

It sounded plausible. It sounded smart. And it was a lie.

The SEC says Frost barely made any real loans, and the ones he did make mostly defaulted. Instead of admitting that, Frost kept the whole thing afloat by taking money from new investors to pay off old ones. It was textbook Ponzi scheme behavior. Worse still, he was lying right to investors’ faces, telling them that only one loan had ever defaulted when in reality almost all of them had, often times in churches.

In a press release published on the SEC website, the agency’s head of enforcement, Gurbir Grewal, put it this way, “This is a classic Ponzi scheme built on lies, fabricated records, and investor trust. Frost portrayed himself as a trustworthy businessman helping local communities, but instead, he was lining his own pockets and propping up his failing business with money from new investors.”

While investors were led to believe they were funding American small businesses in what Brant Frost the V called the “Patriot economy”, the elder Frost was busy providing the high life for his family. He spent hundreds of thousands of investor dollars on lavish family vacations in Maine. He dropped another six figures on jewelry, including a $20,000 Patek Philippe watch (I don’t even know what that is). He burned through more than $2.4 million on credit cards. And here’s one that ought to really raise some eyebrows; he spent over $570,000 of investor money on political donations.

Let me say that again. More than half a million dollars in political donations all while his investors were unknowingly funding the whole circus.

I mentioned in my first post on this scandal that many of you had already reached out to ask whether this scheme’s tentacles reached into Georgia politics. Now we know they did. The Frosts were shoveling money into political campaigns and the Georgia Republican Assembly’s PAC while their business was bleeding cash and funneling millions to themselves. That’s in the SEC’s own filings. The only question now is just how many politicians and political groups were dining off the proceeds of this fraud.

I am going to take this opportunity to call on each and every politician who took money from the Georgia Republican Assembly PAC to return that money to the people it was stolen from.

Insert Narrator voice: But wait! There’s more!

Frost funneled millions of dollars into various companies he also controlled. He transferred millions more to himself and his family members. He even kept cutting himself massive checks right up until the bitter end, including one $100,000 withdrawal that happened just nine freaking days after the SEC interviewed him.

If you have been around Georgia politics for more than five minutes, you know the Frost name. Brant Frost IV and his family have been fixtures in conservative political circles for years. They ran PACs and donated big to candidates while showing up in places where political influence was bought and sold. This was not just some obscure businessman running a side hustle. This was a man deeply connected in the political bloodstream of Georgia.

You better believe there are some uncomfortable conversations ahead.

The SEC is seeking to lock down Frost’s assets, appoint a receiver, and claw back every dollar it can and I hope they can. Frost, and everyone who was in on it, deserves every ounce of accountability the legal system can muster. But it should not stop there.

We need answers about where this money went. Who took political donations from Frost and his companies? Did any elected officials get money that was laundered through this fraud? Will they return it? Or will they pretend they had no idea where the cash came from and hope it all blows over?

There is no spinning this. This is a massive stain on anyone connected to it. I am looking at you Charlice Byrd. I am looking at you Noelle Kahaian. I am looking at you, Colton Moore. And I am looking at that unlovable group of Goofballs, Rejects, and A-Holes.

This is not just an SEC case. It is a test of political integrity in Georgia. Show me you have some.

Stay tuned. My weekend plans? Shot. I will be spending the next couple of days digging through every record I can find to figure out who did what, who got what, and who needs to cough it up. I will gladly give credit to anyone who stands up, owns it, and does the right thing by returning the money. But if you try to keep quiet and hope it blows over, trust me, we are going to make sure everyone knows exactly who you are. You are going to be famous for all the wrong reasons.

And one last point. One of my closest friends, who does not curse, drink, smoke, or have any tattoos made this point to me about the commandment to not take the Lord’s name in vain. His theory is that the actual meaning is when people commit evil while wrapping themselves in Jesus in order to deceive. Yeah. If this is true, and based on what we are hearing through the grape vine about the victims, may God show them the mercy they chose not to give to others while they were robbing these people blind.