The Securities and Exchange Commission filed fraud charges on September 11, 2026, against Paul Thomas Croft, Jonathan David Frost and Matthew William Dira over an alleged multimillion-dollar, multi-year securities offering fraud. The SEC alleges that approximately $64 million was raised from more than 230 investors between approximately January 2021 and September 2023.
In a complaint filed in the U.S. District Court for the Eastern District of Tennessee, the SEC alleges that Croft and Frost, through entities including Croft & Frost, PLLC and others, fraudulently offered and sold securities in the form of promissory notes and membership interests in limited liability companies. According to the complaint, the funds were not used for the profit-making activities represented to investors.
The SEC alleges that Croft and Frost instead misappropriated investor money to cover expenses of a separate tax preparation business, finance their luxury lifestyles and make Ponzi-style payments to existing investors. The complaint further alleges that Dira, acting as a securities salesperson and administrator, continued soliciting and selling millions of dollars’ worth of promissory notes after receiving communications warning that Croft and Frost were likely running a Ponzi scheme. Dira earned more than $500,000 in salary and commissions, according to the complaint.
The complaint charges Croft and Frost with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. It charges Dira with violating Section 17(a)(2) of the Securities Act and Section 15(a)(1) of the Exchange Act.
Frost consented to the entry of a bifurcated judgment, subject to court approval. The proposed judgment would permanently enjoin him from violating the charged federal securities laws and from participating in the issuance, purchase, offer or sale of any security except for his own personal accounts. It would also order him to pay disgorgement, prejudgment interest and a civil penalty in amounts to be determined by the court upon the SEC’s motion. Frost previously pleaded guilty to criminal fraud and money laundering charges in a parallel case, United States v. Jonathan D. Frost, No. 1:26-cr-00004-TRM-CHS.