A 93-year-old Georgia man says he invested more than $1.3 million of his retirement savings into what federal investigators now allege was a massive Ponzi scheme based in Georgia.
The U.S. Securities and Exchange Commission has accused First Liberty Building and Loan and its founder, Edwin Brant Frost IV, of defrauding at least 300 investors out of $140 million.
Hampton resident James McMaster is one of those investors. He told Channel 2 consumer investigator Justin Gray that he believed the investment was a safe way to generate monthly income in retirement.
McMaster said he met personally with Frost several times at the First Liberty offices, sharing his life story with Frost from shining shoes as a child to growing up the son of sharecroppers.
“I’m not going to let it eat me alive,” McMaster told Gray. “The first money was $250,000.”
McMaster said the company delivered monthly interest checks as promised, which encouraged him to continue investing. He believed his money was being used to provide bridge loan financing for specific construction projects.
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After the initial investment, he wired money for two more projects and even visited a memory care facility in Athens that one of those investments was supposed to help fund.
“Total, I have $1.3 million invested there,” McMaster said.
But according to the SEC, Frost allegedly used new investor money to pay those interest payments.
“I wouldn’t want to physically harm him, but he needs to feel the pain, you know, because he’s going to bring pain to people who don’t deserve it,” McMaster said.
Earlier this month, Channel 2 Action News cameras were rolling as a court-appointed receiver removed boxes of financial records and hard drives from First Liberty’s offices. Frost was seen surrendering the keys.
Federal investigators said Frost used investor funds for personal luxury spending, including:
$570,000 in political contributions
$140,000 in jewelry
A $20,000 Patek Philippe watch
$335,000 to a rare coin dealer