Alabama officials are probing ties between political contributions in the state and an alleged $140 million Ponzi scheme based in Georgia amid new scrutiny from federal regulators.

The Alabama Securities Commission announced on Monday it has opened an inquiry into First Liberty Building & Loan LLC and its founder, Edwin Brant Frost IV, who is accused by the U.S. Securities and Exchange Commission of defrauding hundreds of investors through a years-long scheme.

Also on Monday morning, Alabama Secretary of State Wes Allen called on Alabama political candidates and committees who received donations from Frost or his related businesses to return the money to the court-appointed receiver in the federal case.

“I take allegations of financial fraud seriously, especially when that fraud bleeds into campaign finance,” Allen said. “I encourage any Alabamians who have been involved to cooperate fully with law enforcement, including the SEC and our Alabama Securities Commission to ensure that the victims who have been misled may be made whole.”

While the Secretary of State’s Office oversees campaign finance reporting in Alabama, it does not have enforcement powers to investigate or prosecute fraud, nor can it compel the return of campaign contributions.

The ASC, which regulates investment activity in the state, acknowledged Thursday that it is responding to numerous inquiries about the matter and has begun gathering information.

“We have been in contact with authorities in Alabama and Georgia, and have received numerous requests for information regarding this matter. We have opened an inquiry into the matter and will ensure that the interests of the State of Alabama and its investors are protected,” ASC Director Amanda Senn said. 

“Further public comment by us at this time would be inappropriate.”

Frost, an investor with deep ties to the Georgia Republican Party, and his affiliated firms are accused of raising more than $140 million from investors between 2014 and 2025, misappropriating at least $5 million for personal expenses and using $570,000 for political donations. 

The SEC’s complaint, filed July 10 in U.S. District Court for the Northern District of Georgia, alleges that Frost operated his businesses as a Ponzi scheme beginning in 2021.

According to campaign finance records, more than $132,000 from Frost, his family members, or his companies went to Alabama political candidates and political action committees over the past four years.

Among the recipients include State Auditor Andrew Sorrell, State Rep. Ben Harrison (R-Elkmont) and Alabama State Board of Education member Allen Long.

Sorrell, also a candidate running for Alabama Secretary of State in 2026, said in a statement to Yellowhammer News that he was unaware of the alleged scheme until federal authorities brought it to light. 

His campaign and affiliated PAC, Alabama Christian Citizens, received at least $71,000 combined from Frost-related sources.

“I am among the hundreds of people who lost money when the federal government recently discovered that First Liberty Building & Loan in Newnan, Georgia was defrauding its investors through a Madoff-like Ponzi scheme. The political action committee that I operate had invested money as well, which is commonplace with committees of this kind,” Sorrell said. 

“The company had marketed itself through conservative channels as a ‘patriotic’ and ‘Christian’ investment opportunity.”

Sorrell said he plans to return all contributions once a process is available through the court-appointed receiver.

According to FCPA filings, Sorrell’s PAC issued a $29,000 loan to First Liberty in 2024 and later received interest payments through spring 2025.

“It’s an unfortunate situation that happens frequently across the U.S., and all of us who trusted the marketing and lost our investments have learned a tough lesson,” Sorrell said. 

“It’s important that all recovered money goes back to the investors so everyone can be made whole rather than to the individual who defrauded us.”

Ben Harrison, who received over $21,000 in contributions from Brant Frost V, the son of Edwin Frost and a principal in the investment firm, also said he had no prior knowledge of the SEC complaint.

“This is the first I’ve heard about this issue,” Harrison said in a statement to Yellowhammer News last week. “I am looking into the legal avenues to return the funds. I am committed to making sure I do everything in my power to support the victims of this financial tragedy.”

State Board of Education member Allen Long received a $40,000 donation from Frost-linked First National Investments in December 2023. Long also received a $500 contribution directly from Edwin Frost that same month. 

The Frost family’s political involvement was not at all partial to Alabama.

Federal records show they also contributed to Georgia Gov. Brian Kemp, Florida Governor Ron DeSantis, and U.S. Rep. Lauren Boebert (R-Colo). In Georgia, Secretary of State Brad Raffensperger has also called for the return of Frost-affiliated donations.

The Alabama Securities Commission is asking anyone with relevant information to call 1-800-222-1253.