Georgia Secretary of State Brad Raffensperger tapped a veteran securities fraud attorney to lead his office’s probe of First Liberty Building & Loan, the politically connected Newnan-based lender accused by federal regulators of running a $140 million Ponzi scheme.
The appointment of Jason Doss is the latest step by Raffensperger to aggressively escalate his office’s investigation of the company, which collapsed in June and has deep ties to GOP leaders.
“This is a complex investigation, and victims across our state are hurting,” said Raffensperger. “They’ve been robbed of their retirement, and their future is uncertain. By appointing Mr. Doss as our investigative agent, we are ramping up our efforts to ensure justice is served.”
The development comes as a group of senior Georgia House Republicans is backing legislation that would stop Raffensperger’s office from overseeing securities and commodities and transfer that duty to the Georgia Department of Banking and Finance, the state’s bank regulator and an agency that reports to the governor.
House Majority Leader Chuck Efstration, one of the lead sponsors, said the measure was about efficiency — not an attempt to derail the First Liberty investigation.
“It makes sense for the Department of Banking & Finance to regulate securities and conduct investigations,” he said. “This department already provides consumer protection and regulates other financial and lending entities.”
First Liberty wasn’t a bank and did not hold deposits or have insurance from the Federal Deposit Insurance Corp. The company made loans and sold interests in those loans to investors. It advertised them as safe investments offering hefty returns.
The U.S. Securities and Exchange Commission sued First Liberty, alleging the lender was operating a Ponzi scheme. A court-appointed guardian known as a receiver is attempting to recoup funds for jilted investors. No criminal charges have been filed.
The Securities Industry and Financial Markets Association, one of the industry’s leading organizations, raised pointed questions about the House bill in a letter to legislative leaders this week.
Raffensperger, who is running for governor, has warned the shift could slow the probe just as it’s ramping up. Investigators recently summoned witnesses, including First Liberty founder Brant Frost IV and his son.
Doss is a former president of the Public Investors Arbitration Bar Association and has experience handling high-stakes securities disputes and conducting investigative hearings.
“We have been investigating this $140 million fraud in conjunction with federal authorities, and what we have uncovered so far is shocking,” Raffensperger said.
“Victims of this scheme are hurting, and we are going to do whatever it takes to ensure accountability.”
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