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WASHINGTON D.C. – Today, Congressman David Scott (GA-13), a senior member of the House Financial Services Committee, sent a letter to Securities and Exchange Commission (SEC) Chair Paul Atkins demanding answers over the agency’s failure to detect the sprawling $140 million Ponzi scheme orchestrated by Georgia-based lender First Liberty Building and Loan. The letter calls for greater transparency and accountability following the SEC’s federal seizure of First Liberty.

In his letter, Congressman David Scott sharply criticizes the SEC for its years-long inability to detect or stop the fraud, which impacted hundreds of investors in Georgia and over a thousand investors nationwide. Despite numerous red flags, such as fabricated loan pools, implausible investment returns, and aggressive social media marketing, the SEC waited until July 10, 2025, to act, by which point nearly 90% of First Liberty’s loan portfolio had already defaulted. The congressman calls the SEC’s oversight breakdown “a catastrophic collapse of federal supervision.”

“This is not just a regulatory lapse, it is a total failure of oversight that enabled a $140 million Ponzi scheme to thrive in broad daylight,” said Congressman David Scott. “The worst hit investors are not millionaires or billionaires, they are retirees, faith leaders, and veterans who were failed by the SEC and Georgia state regulators. Many have lost their life savings, retirement security, and the very opportunity to financially support their families. The fact that this level of fraud went undetected for so long is completely unacceptable. The people of Georgia, especially those whose future was shattered by this scheme deserve accountability—not silence.”

Congressman David Scott’s letter aims at uncovering the full extent of the SEC’s oversight failures and identifying a path forward for victims to be made whole. The letter also questions why the SEC and state regulators—including the Georgia Department of Banking and Finance—failed to coordinate efforts, despite reportedly receiving multiple red flags and investor complaints. It demands a full accounting of:

• When and how the SEC first became aware of First Liberty’s operation and whether SEC examiners reviewed the firm’s activities prior to July 2025
• Why the firm was allowed to continue issuing unregistered offerings without disclosure or allowed to operate without registering as a broker dealer
• What structural failures exist in the SEC’s regional supervisory and whistleblower processes that led to this apparent regulatory breakdown
• What specific steps are being taken to pursue asset recovery, including offshore accounts or properties purchased with stolen investor funds

Additionally, Congressman Scott is requesting the SEC commit to a full and timely public report outlining how this massive Ponzi scheme operation was able to go on without detection. He has called for congressional hearings and a Government Accountability Office (GAO) investigation into whether loopholes in Regulation D and resource shortfalls at the SEC are enabling widespread abuse in private financial markets.

Congressman Scott remains committed to ensuring every victim receives justice and that the inexcusable regulatory failures which allowed this fraud to occur are addressed swiftly and thoroughly.

Read full letter HERE.

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