The Alabama Securities Commission has opened an investigation into the possible impact of a Ponzi scheme run by Brant Frost IV on Alabama.
Frost, a well connected Georgia Republican with a history of political leadership and campaign fundraising, has recently become the target of a lawsuit from the federal Securities and Exchange Commission. The SEC has accused Frost and his company, First Liberty Building & Loan, of operating as a Ponzi scheme.
Ponzi schemes are investment scams that gather funds from early investors, then pay those investors with funds gathered from later investors. This creates the illusion of high profits, and allows the scheme to promise a high rate of return with little risk to investors. According to the SEC, First Liberty Building and Loan had been lying to investors and operating as a Ponzi scheme as early as 2021.
According to the SEC, $140 million was defrauded from investors.
Frost received support from popular political pundits, and those who lost funds to his scheme include many far right supporters who heard him endorsed by conservative radio hosts, such as John Fredericks, Erick Erickson, Hugh Hewitt and Charlie Kirk.
Erickson has since called the SEC charges “disturbing” and expressed surprise.
“I have talked to them many times, never had an inkling that any of that was going on,” said Fredericks.
The court-appointed receiver, S. Gregory Hays, who is tasked with recovering the funds, told the Associated Press that investors are likely to suffer heavy losses.
According to the complaint, Frost misappropriated over $19 million for himself, his family members and his businesses. This misappropriated funds included substantial contributions to political campaigns.
Reportedly, Frost and those connected to him donated at least $132,000 to Alabama politicians and political action committees. Alabama State Auditor Andrew Sorrell, Rep. Ben Harrison, R-Elkmont, and Alabama State Board of Education representative Allen Long were among those who received funding from the misappropriated funds.
Sorrell both gained and lost money from First Liberty, and says he is among those who have lost finances due to Frost’s scheme. While the amount he invested is unknown, a PAC controlled by him, Alabama Christian Citizens, invested $29,000.
Sorrell did receive $55,000 in campaign funds, and both Alabama Christian Citizens and his federal-level PAC, U.S. Christian Citizens received $12,500.
Harrison received $22,500 and Long received $40,000.
Alabama Secretary of State Wes Allen recently made a public appeal for all Alabama Politicians to return the funds. Both Sorrell and Harrison have stated that they would try to return the funds given to them to the SEC to be redistributed back to the victims.
Alabama top stories in brief
Previously frozen federal education funds have been released
- After an unexpected freeze of federal education funds on June 30, the U.S. Office of Management and Budget has released funds to the states.
- This includes over $50 million in funding for Alabama.
- Alabama U.S. Senator Katie Britt was one of 10 Republican senators who signed a letter calling for the OMB to “faithfully implement” providing the funds to schools, saying not doing so would be harmful to students and families.
- In response to the funds being released, Britt said, “I applaud the announcement from OMB Director Vought to release the outstanding education formula funds to states. I have long stated our local communities know how to best serve students and families. This funding will help states and school districts provide students an excellent education.”
New college match tool grants early offers to students
- The Alabama Direct Admission Initiative, which was unveiled on July 31, is aimed at making applying for college easier and more accessible.
- Students create an online profile, uploading their transcript and outlining their academic interests, then be matched with colleges they meet the criteria for, without them needing to fill out a traditional application.
- The platform will be available to students Aug. 26, and has 16 four-year and 23 two-year colleges participating for the launch.
Alabama attorneys removed from case after submitting AI-generated citations
- Three attorneys employed by the Alabama Department of Corrections (DOC) have been removed from a civil rights lawsuit after using artificial intelligence to produce four fabricated citations.
- U.S. District Court Judge for the Northern District of Alabama Anna M. Manasco ruled on the decision, and referred the case to the Alabama State Bar Association as well.
- The attorneys represented the DOC in defense of a case brought by Frankie Brown, a former inmate who was stabbed while in an Alabama prison.
New policy requires law enforcement to report deaths in custody
- The Alabama Justice Information Commission unanimously voted to establish a platform, process and requirement of police and other law enforcement to report when a death occurs in their custody.
- This update will allow the Alabama Department of Economic and Community affairs to report the recorded statistics to the U.S. Department of Justice, whereas previously individual systems voluntarily submitted deaths.
- This new protocol will meet requirements needed for Alabama’s corrections and law enforcement systems to keep federal grants.
- Whether or not these statistics are made available to the public is up to each agency.
Our articles you might have missed:
- There are over 400 species of birds scattered across Alabama. In the latest edition of The Longleaf Hiker, Hannah Irvin writes about the different types of birds that can be found in Alabama and her personal experiences working with them as an environmental educator.
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