On July 10, 2025, the SEC filed charges against First Liberty Building & Loan, LLC. The allegations are that First Liberty was party of a Ponzi scheme. That scheme victimized approximately 300 investors investing approximately $140 million. Now, much of the money is missing.
First Liberty ran the scheme from approximately 2014 through 2025. The scheme involved the offering of promissory notes and loan participation agreements to retail investors. The lure of the investment was that the investment offered returns of up to 18%. The lure also included representations the that very few of these loans had defaulted and that they would be repaid by borrowers via Small Business Administration or other commercial loans. This turned out to be untrue.
Most of the loans did not perform as promised and defaulted. Since at least 2021, First Liberty used new investor funds to make principal and interest payments to existing investors, according to the complaint. Instead of using funds for the business, the SEC alleges that First Liberty executives stole funds for personal use,
The scheme victimized small, retail investors. After victimizing friends and family, those perpetrating the scheme used public advertising in the form of radio ads and podcasts.
“The promise of a high rate of return on an investment is a red flag that should make all potential investors think twice or maybe even three times before investing their money,” stated Justin C. Jeffries, Associate Director of Enforcement for the SEC’s Atlanta Regional Office in the SEC’s press release. “Unfortunately, we’ve seen this movie before – bad actors luring investors with promises of seemingly over-generous returns – and it does not end well.”
Jeffrey Pederson represents investors. This post is for investor educational purposes.
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