Georgia officials issue criminal referrals, fines in alleged $140 million Ponzi scheme
After months of investigating allegations of a $140 million Ponzi scheme, Georgia Secretary of State Brad Raffensperger's office has made numerous criminal referrals and issued $1 million in fines, ensnaring a number of state GOP figures.
Last week, Raffensperger's office referred Edwin Brant Frost IV -- the son of First Liberty Building & Loan founder Edwin Brant Frost V -- for possible criminal prosecution to the Coweta County district attorney's office, and fined him $500,000, according to a copy of the letter obtained by ABC News and an emergency order.
Frost V was the head of the Coweta County GOP, but resigned in the wake of the collapse of his father's company. He is now accused of soliciting investors to the firm in what investigators call a massive Ponzi scheme.
The secretary of state's office, in the emergency order, claims Frost V "provided false and misleading information" to multiple investors, who in turn invested over $1 million with the firm.
In a statement, an attorney for Frost V said, "Mr. Frost denies the allegations. The Secretary of State did not provide him an opportunity to address his baseless accusations before rushing to judgment and to the press. We will continue to defend Mr. Frost."
The secretary of state's office has also made a second referral for possible criminal prosecution against a leader of a local GOP group, according to a copy of the letter obtained by ABC News and an emergency order.
The secretary of state's office, according to the letter, referred Timothy Nathaniel Darnell -- the president of the conservative group Georgia Republican Assembly -- for possible criminal charges to the Cobb County district attorney and fined him $500,000.
Darnell, according to Raffensperger's office, was "close friends" with the Frost family and placed 45 clients in their firm, for which he allegedly received compensation without disclosing it, according to the emergency order. One investor in an affidavit said Darnell "used his political and religious views to gain our trust," the order said.
Darnell's attorney, in a statement, said, "Mr. Darnell denies the allegations in the Emergency Order."
"Mr. Raffensperger has rushed to judgment and improperly rushed to the press for his own political gains." the statement said. "Although we previously asked the Secretary of State for the chance to discuss this matter before it took any action, the Secretary of State ignored that request and did not provide us an opportunity to address these allegations before making them public."
"Although we have sympathy for those who lost money, we will continue to defend Mr. Darnell in this matter," the attorney's statement said.
