Georgia’s Brad Raffensperger showcases Ponzi scheme fight as he runs for governor
Apr 1, 2026, 11:23 AM
ATLANTA (AP) — It was a moment of triumph for Georgia Secretary of State Brad Raffensperger on Wednesday, as he announced his office had persuaded a securities firm to refund $6.7 million to investors who lost money in an alleged $156 million Ponzi scheme that victimized some in the top ranks of Republican politics in Georgia and Alabama.
While securities regulation has long been a function of Georgia’s secretary of state, Raffensperger has been showcasing his efforts to investigate losses from First Liberty Building & Loan while simultaneously seeking the Republican nomination for governor.
Raffensperger announced that Bankers Life, a unit of Indiana-based CNO Financial Group, would repay what 46 people had invested in First Liberty through Timothy Nathaniel Darnell, one of the firm’s former financial advisers.
“Bankers Life, as a company, chose to do the right thing and help the Georgians who lost everything in this alleged Ponzi scheme,” Raffensperger told reporters.
The company could have faced liability for failing to supervise Darnell and prevent him from selling investments that Bankers Life hadn’t approved.
Raffensperger’s office has issued $500,000 in civil fines against three people so far and won a rare legislative victory to enhance his power to help victims of securities fraud.
The moves come as Raffensperger runs in a fractious field for a May 19 primary that includes Lt. Gov. Burt Jones, health care entrepreneur Rick Jackson and state Attorney General Chris Carr. They’re all bidding to replace Republican Gov. Brian Kemp, who is barred from seeking a third term. Many Trump-loyal Republicans despise Raffensperger, who has been best known for refusing Donald Trump’s demand that he “find” votes to overturn Democrat Joe Biden’s 2020 presidential win in Georgia. The securities case gives him a chance to show himself differently to GOP voters who might remain open to him.
Democrats, meanwhile, hope to win the governor’s office in swing-state Georgia for the first time in 24 years. Top Democrats include former Atlanta Mayor Keisha Lance Bottoms, Republican-turned-Democrat Geoff Duncan, former state Sen. Jason Esteves and former state Labor Commissioner Michael Thurmond.
First Liberty said it was a lender making high-interest short-term loans to businesses, paying investors up to 16% annual interest. But a U.S. Securities and Exchange Commission lawsuit filed last year claims that company leader and Republican activist Brant Frost IV stole $17 million for himself, his relatives and affiliated companies, and lent millions more that borrowers never repaid.
Among those who lost money were a company run by former Georgia GOP Chairman David Shafer; Alabama state Auditor Andrew Sorrell; and a political action committee controlled by the Republican Sorrell. Party activists have said many grassroots Republicans also lost money, while others were lured by ads on shows hosted by conservatives including Erick Erickson, Hugh Hewitt and Charlie Kirk.
In addition to the civil fines, Raffensperger’s office has in recent months asked prosecutors to consider criminal charges against the three people investigators allege helped solicit money for First Liberty. They include Brant Frost V, the son of Brant Frost IV; Fayette County school board member Randy Hough; and Darnell, who is also the president of the Georgia Republican Assembly, a group that seeks to influence state Republican politics.
Frost V and Darnell have denied wrongdoing. Hough hasn’t responded to requests for comment. No one has been charged criminally.
A federal judge appointed a receiver who is also trying to get money back for investors. A March 23 receiver’s report found First Liberty raised nearly $156 million from investors and paid out $89 million in principal and interest, leaving at least $65 million in losses. The receiver had $5.16 million in cash as of March 23, and was trying to recoup money from nearly 30 unpaid loans by First Liberty.
Ponzi schemes are common. For example, a suburban Atlanta man was convicted in January in a $380 million scheme. But because some First Liberty victims were key Republicans, politicians have been more interested.
State House Republicans sought to strip Raffensperger’s office of securities regulation this year, instead putting state banking regulators in charge. Lawmakers blamed Raffensperger’s office for failing to detect schemes before they imploded. But the secretary of state, frequently a punching bag for Republican legislators, fought off those efforts. Then he won a victory, persuading the General Assembly to pass a bill allowing his office to collect restitution for victims instead of just fining wrongdoers. That measure awaits Kemp’s signature or veto.
