By Mason Edwards
Chattanooga Times Free Press, Tenn.
(TNS)
Jan. 27 — Jonathan Frost, who turned a Chattanooga accounting business into a hub for flashy social media-driven investments that collapsed, has agreed to plead guilty to federal conspiracy charges involving wire and tax fraud and money laundering, according to documents in federal court.
The plea agreement was signed by Frost and his attorney on Friday and by Assistant U.S. Attorney Frank Dale Jr. on Tuesday. It calls for up to 20 years in prison on each of the wire fraud and money laundering conspiracies and up to five years for alleged tax fraud conspiracy. The document says it is pending approval by the Department of Justice.
Frost agreed to multimillion-dollar financial penalties, including turning over all assets tied to the criminal activity and a personal money judgment to the government of not less than $70 million, the court records said.
Even though he has knowingly and voluntarily signed the plea agreement, Frost has not yet pleaded guilty, according to his attorney, Lee Davis. The lawyer said by phone that while he could confirm the agreement was signed, he could not comment much further.
We have a negotiated plea with the federal government, and you’ve got a copy of that,” Davis said. “And we’re looking forward to going to court and entering that plea in court.”
Frost did not immediately respond to a text and a voicemail requesting comment. Reached by phone, his one-time business partner Paul Croft expressed shock about the plea agreement. He said he had no comment and referred questions to his lawyer, who did not answer an after-hours call.
Plea agreement
Between his charges, Frost faces up to $850,000 in fines, not including special assessments, forfeitures and restitution, the agreement said. As part of the deal, Frost agreed that he knowingly defrauded investors with a hydrogen plant scheme, which would have supposedly used solar power to extract hydrogen gas from water.
“Funds contributed by investors, however, were not used for building a Hydrogen Plant,” the filing said, “but were, instead, converted to the personal use of Frost and his coconspirators and for expenditures wholly unrelated to the construction of a Hydrogen Plant.”
Investor funds received through the fraudulent wire fraud were moved to a bank account Frost used to pay his Chattanooga accounting firm employees, the court records said, adding that a portion of the hydrogen plant investments were also used to pay “hard money” loans that Frost and his coconspirators used to keep the fraud scheme flowing.
In addition to the hydrogen plant scheme, Frost and a coconspirator knowingly filed false tax returns with materially false deductions and exemptions, court records said, adding that their fraudulent actions resulted in a tax loss of over $8 million to the United States.
No federal representative has made any promises as to Frost’s sentence, court records said, as only the judge determines the final conditions. Frost will not have the right to challenge his potential restitution costs to the IRS.
As part of the deal, federal prosecutors will not challenge a two-level reduction in Frost’s sentencing range. Frost agreed to help the U.S. recover any assets subject to forfeiture and agreed with the court to pay restitution to victims of any offense charged in the case and victims of any activity that was part of Frost’s scheme.
Investor reaction
One of the investors who bought into the promise of the clean energy hydroplant, Pat Dougherty, 66, said Frost and others defrauded him of his retirement and life savings. After nine months of retirement, he had to go back to work.
Hearing the news of the plea agreement made Dougherty giddy, he said by phone.
“I am telling you I am on Cloud 9 right now,” he said. “I want to cry.”
It’s been almost two and a half years since the accounting firm Croft & Frost closed its doors, he said, and he thought Frost and the other defendants would get away or face a slap on the wrist.
Dougherty said he was approached to invest with Frost in June 2021, and from then, it was a constant battle back and forth, either texting or calling.
He said he hoped the restitution would come back to the victims, saying he believes the firm hurt over 200 people. The majority of people swindled out of their money never tell anyone out of shame and embarrassment, he said.
“And that was me,” Dougherty said. “I couldn’t sleep. I couldn’t eat. And so I sat down at the computer and I said, ‘I gotta get this out.'”
Dougherty published a book about the incident in 2023, and he has sold about a thousand copies since, he said. He’s said he’s glad Frost might be held criminally responsible.
“It’s been quite a ride these last three and a half, four years, to be honest with you, he said.
Hydrogen plant
After the accounting firm laid off its entire staff and permanently locked its doors in September 2023, Frost, Croft and others have faced repeated accusations of illegal or bad business practices.
One lawsuit accused the firm of defrauding investors of about $50 million to sustain other businesses and maintain an extravagant lifestyle. The suit, filed in Illinois in 2024, claimed the defendants sold more than $30 million of investments into the $130 million clean energy project but contributed less than $200,000 to the project and returned less than $2 million to investors.
Investor money was allegedly used to pay for a car collection and a $27,000 per month credit card bill, according to the lawsuit, alleging that over $370,000 was paid to a swimming pool contractor in New Jersey.
Photo caption: Jonathan Frost (via his YouTube page)
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© 2026 the Chattanooga Times/Free Press (Chattanooga, Tenn.). Visit www.timesfreepress.com. Distributed by Tribune Content Agency LLC.
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