“I received two interest checks,” Hortman mentioned during an interview on Wednesday. “I was expecting a check at the start of the month, but it never arrived.”
Now, investors like Hortman are left pondering whether they’ll recover their investments as the company plans to close on Friday. The company, as stated on its website, has stopped all operations, ceased its investment programs, and is collaborating with federal authorities for an “orderly dissolution of the business.”
It’s currently unclear which federal agencies are involved. Both the U.S. Attorney’s Office in Atlanta and the Securities and Exchange Commission in Washington chose not to provide comments this week.
State regulators are also investigating the situation. Secretary of State Brad Raffensperger, who oversees securities regulation in the state, mentioned a civil investigation was initiated and alerted investors to contact the regulator.
“I’m in shock,” Hortman expressed, stating that he is seeking answers but hasn’t heard back from the company.
The collapse of First Liberty has caused significant concern within Georgia’s Republican network.
Brandt Frost IV, the founder and president of First Liberty, along with his family, had strong ties to conservative politics. The company was marketed to audiences aligned with the GOP.
Marketing materials showcased the company’s presence in ads for shows like the “Hugh Hewitt Show” and the “Eric Erickson Show.” Frost’s son and a key company figure, Brant Frost V, often touted the business as a means for everyday investors to support the “patriot economy.”
The firm had offered conventional products like small business management loans and promised “creative finance solutions,” allowing loans that ranged from $250,000 to $20 million.
The message promoted was clear: “When a major bank says no, we say yes.”
First Liberty provided the opportunity for investors to purchase “First Liberty Notes,” which were short-term loans initiated by businesses.
Hortman invested $200,000 in April following his initial meeting with Brant Frost V and another executive at the Newnan office. He was led to believe he would receive a 12% return on his investment. If the total reached $250,000, he was told the rate could increase to 13%.
After meeting Elder Frost in June, Hortman decided to invest an additional $75,000. Their 30-minute discussion meandered beyond business to include family matters.
“He reminded me of the type of grandfather who just seems to really care,” Hortman recalled.
While First Liberty did acknowledge the investment risks, Hortman noted that Elder Frost assured him he had never let investors lose money.
Frost IV has issued a personal apology to some investors following a prepared statement where he expressed regret for his involvement and mentioned that federal authorities were shutting down his business, according to individuals familiar with his comments.
The Frost family has not responded to multiple inquiries for comments. The company put out a general statement indicating they would not provide further information about the ongoing situation.
Deep Roots
While the Frost name may not be widely recognized outside political circles, the family has historically influenced Georgia’s GOP towards a more conservative ideology. Brant Frost V has been a former vice-chairman of the party and has held a long-term position as chairman of the Coweta GOP. His sister, Katie Frost, oversees the state GOP’s third district committee.
Until recently, both siblings were active within the Georgia Republican Congress, a faction that urges local leaders to endorse candidates who fit the Republican mold and to engage in a continuous struggle against the party establishment.
The GRA PAC, a political action committee, lists its Newnan address as the headquarters of First Liberty, with Brant Frost named as its treasurer. This PAC has reportedly raised over $320,000 since 2022 to support Republican state officials.
David Emmady, who leads the state ethics committee, indicated awareness of the scrutiny over First Liberty but refrained from discussing the specifics of the ongoing investigation.
This isn’t the first instance of legal attention for First Liberty. In a 2013 lawsuit, the company was accused of a “long-term pattern of repeated, material misstatements” aimed at securing a $450,000 investment in promissory notes. A year later, the company parted ways with an executive involved.
Legal experts anticipate this situation might unfold over time. Craig Kuglar, a lawyer who has previously aided victims of Ponzi schemes, has started looking into First Liberty’s collapse and hopes that federal actions will persist.
“We’re just at the initial stages here, but investors may have a chance to survive this,” Kuglar noted.
This scenario has distressed another investor, Jordan Baldwin, who said he invested about $230,000 over three years for what he believed were short-term loans.
Baldwin acknowledged there were risks but felt secure given the offered 16% returns and regular interest payments—at least initially.
However, he recently noticed some warning signs. Interest payments began arriving late, and when he attempted to withdraw his funds, executives encouraged him to stay invested.
He eventually managed to retrieve $80,000, but still faces a $150,000 loss.
“I know several people who are in a far worse position than I am,” he shared. “Some have lost tenfold what I have.”
Baldwin described having sleepless nights, wanting answers. While some investors received personal calls from Frost IV after he apologized for the company’s financial troubles, Baldwin hasn’t heard from him and isn’t sure if that’s a concern.
“I have a part of me that wants justice, but I also want clarity,” he expressed. “An apology isn’t quite enough for me; I want to understand what went wrong.”
