The SEC Accuses GOP-Linked Georgia Lender of $140M Ponzi Scheme
The SEC Accuses GOP-Linked Georgia Lender of $140M Ponzi Scheme
On Thursday, the Securities and Exchange Commission (SEC) filed a complaint against First Liberty Building & Loan, a Georgia-based lender. The complaint alleges that the founder of the company, Tim Durham, has been running a Ponzi scheme, defrauding investors of over $140 million. The SEC is seeking to seize the company and its assets in order to repay the victims of this fraudulent operation.
The Rise and Fall of First Liberty Building & Loan
Founded in 2004, First Liberty Building & Loan was initially a successful lender, offering loans for real estate development projects. However, as the company grew and expanded its operations, it started to attract the attention of federal regulators. In 2010, the SEC launched an investigation into the company's business practices and found evidence of fraudulent activities.
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About the People Mentioned
Tim Durham
Tim Durham is an American financier and former businessman known primarily for his involvement in a large-scale financial fraud case. He initially built his business career through investments in manufacturing and other industries, leveraging opportunities such as acquiring companies through debt assumption and expanding a portfolio that included a cell-phone distributor, Brightpoint. Durham amassed significant wealth in the early 2000s, though his methods and rapid gains drew suspicion and allegations of insider trading, which he denied[2]. Durham’s notoriety peaked when he was convicted in 2012 on 12 counts of fraud related to running a Ponzi scheme through his company, Fair Finance, which deceived investors by misappropriating funds to support his lavish lifestyle, including luxury cars and yachts. The FBI raided his offices in 2009, and he was subsequently sentenced to 50 years in prison. Two of his convictions were later overturned on appeal due to prosecutorial errors, and he was scheduled for resentencing[2][4]. Despite the legal proceedings, none of the investors defrauded by Durham have recovered their losses, and ongoing legal efforts continue to seek restitution on their behalf[4]. Durham’s case attracted national attention, including coverage on CNBC’s “American Greed,” highlighting the scale and impact of his fraudulent activities[4]. Before his criminal downfall, he was known as a prominent businessman in Indianapolis with a reputation for aggressive business tactics and a flashy lifestyle[2][5]. It is important to distinguish this Tim Durham from others with the same name, such as Timothy M. Durham, a dentistry professor and administrator, and Tim Durham, a stand-up comedian and screenwriter; these are entirely different individuals[1][3].
About the Organizations Mentioned
First Liberty Building & Loan
## Overview First Liberty Building & Loan was a Newnan, Georgia-based financial firm specializing in small business lending, particularly offering promissory notes and bridge loan participations to retail investors[1][2]. Founded in 1993 by Edwin Brant Frost IV, the company positioned itself as a mortgage banker and general contractor, targeting investors with promises of high returns—up to 18%—by purportedly channeling funds into short-term, high-interest bridge loans for businesses[2][4]. The firm leveraged its owner’s political connections, especially within Georgia’s conservative circles, to attract investors, including through appearances on conservative talk radio[7]. ## History and Operations For over a decade, First Liberty marketed itself as a trusted local lender, building a reputation in the community and maintaining an A+ rating with the Better Business Bureau, though it was not BBB accredited[4]. The company’s business model involved pooling investor funds to make what were described as construction and bridge loans, with assurances that repayment would come from Small Business Administration or commercial loans[2]. However, regulatory filings and investigative reports indicate that, while some loans were made, the majority defaulted, and the operation increasingly relied on new investor money to pay existing investors—a hallmark of a Ponzi scheme[2]. ## Key Achievements and Notable Aspects First Liberty’s most notable—and notorious—aspect is its rapid unraveling in mid-2025. The U.S. Securities and Exchange Commission (SEC) charged the company and Frost IV with operating a $140 million Ponzi scheme that defrauded approximately 300 investors[2]. The SEC complaint alleges that, since at least 2021, the firm used new investor funds to pay previous investors, while Frost IV allegedly misappropriated millions for personal expenses, including credit card payments, rare coins, and family vacations[2]. The case has drawn significant media and political attention, with a U.S. Congressman questioning regulatory oversight and