Alabama Investigates Political Donations Tied to Alleged Ponzi Scheme
Alabama officials are investigating connections between political contributions and an alleged $140 million Ponzi scheme orchestrated by Edwin Brant Frost IV, founder of First Liberty Building & Loan LLC. This inquiry follows heightened scrutiny from federal regulators, particularly the U.S. Securities and Exchange Commission (SEC), which has accused Frost of defrauding numerous investors since 2014.
On Monday, Alabama Secretary of State Wes Allen urged candidates and committees that received donations from Frost or his businesses to return the funds to a court-appointed receiver in the federal case. He emphasized the seriousness of financial fraud, especially when it intertwines with campaign finance, and encouraged cooperation from those involved.
The Alabama Securities Commission (ASC) has begun gathering information on Frost’s operations, which reportedly misappropriated substantial funds for personal expenses and political donations, including $570,000 to various campaigns. Over 132,000 of these funds went to Alabama political candidates and action committees over the past four years, affecting officials like State Auditor Andrew Sorrell and State Rep. Ben Harrison, both of whom claimed they were unaware of Frost’s malicious activities until the SEC’s disclosure.
Sorrell, who plans to return all contributions once a process is established, noted that his political action committee had also invested in the scheme, branding it as a ‘patriotic’ investment opportunity. Harrison is exploring legal options to return around $21,000 received from Frost’s family. The investigation extends beyond Alabama, with officials in Georgia also demanding the return of Frost-affiliated donations.
The ASC is urging anyone with information to come forward by calling 1-800-222-1253.
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