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Georgia Secretary of State Brad Raffensperger has issued an emergency cease-and-desist order against Timothy Nathaniel Darnell of Powder Springs, imposing a maximum $500,000 civil penalty, barring him from securities activities in the state, and referring his case for potential criminal prosecution.
The move, dated February 24, 2026, targets Darnell's alleged role in promoting investments in First Liberty Building and Loan, a now-defunct Georgia lender that federal authorities have labeled a Ponzi scheme. The U.S. Securities and Exchange Commission accused First Liberty and its founder, Edwin Brant Frost IV, in July 2025 of defrauding about 300 investors out of at least $140 million through misleading promissory notes and loan participation agreements promising high returns.
Darnell, described in reports as a financial adviser and leader in conservative political circles, including ties to the Georgia Republican Assembly, allegedly recommended First Liberty investments to 45 clients between December 2020 and June 2025. These placements totaled $6.675 million in principal, with roughly 60% of investors aged 60 or older. He reportedly earned about $249,110 in commissions.The emergency order accuses Darnell of violating the Georgia Uniform Securities Act by failing to disclose outside business activities, engaging in unauthorized private securities transactions, using off-channel communications, withholding commission details, and misleading clients with claims that investments were "guaranteed," "secure," or offered "guaranteed growth."
The order bars Darnell from serving as an agent or investment adviser representative in Georgia. The Securities and Charities Division also referred the matter to Cobb County District Attorney Sonya F. Allen for possible criminal charges and to Georgia Insurance Commissioner John F. King, as Darnell holds a license with that agency, reported The Citizen.
This marks the second such enforcement action in a week related to First Liberty. On February 17, 2026, Raffensperger issued a similar $500,000 fine and criminal referral against Edwin Brant Frost V, a principal in the firm and former Coweta County Republican Party chairman.Raffensperger emphasized the severity of exploiting affinity groups. “Exploiting faith and politics for an affinity fraud warrants the full $500,000 fine,” he stated. He urged the Georgia legislature to revive and pass Senate Bill 284, which stalled last year. The bill would redirect certain civil penalties collected by his office to compensate victims rather than the state's general fund. Without it, any collected fines—including the $500,000 from Darnell—would go to state coffers.
Victim accounts highlight the personal toll. One 74-year-old North Georgia widow, identified as "Lou," told local media she invested her entire $50,000 retirement savings in November 2024 after meeting Darnell. She accepted a 9% return, reassured by promises of security and quick recovery if issues arose. After First Liberty's collapse in July 2025, she received no interest or principal repayments. Now surviving on $1,500 monthly Social Security, she faces vehicle breakdowns, home repairs, and mounting bills. “I think they all need to be prosecuted because to me, it’s just like a murder,” she said of those involved, writes The Citizen.
Darnell has 30 days to request a hearing; otherwise, the order becomes final. A criminal referral does not guarantee charges—prosecutors will decide based on evidence.
The ongoing probe into First Liberty's collapse continues to ripple through Georgia's political and financial spheres, with state investigators expanding scrutiny beyond the Frost family to associated promoters and advisers.
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