By Mason Edwards
Chattanooga Times Free Press, Tenn.
(TNS)
It’s unlikely that Chattanooga accountant Jonathan Frost, who has agreed to plead guilty to three federal financial crimes and could then owe the government at least $70 million, has the funds to repay the government or his victims.
Frost, his attorney and a federal prosecutor signed a still-pending plea agreement filed Tuesday, in which the Chattanooga businessman agreed to conditions involving admitting guilt, decades of potential prison time and multimillion-dollar financial penalties, including, unless otherwise negotiated, the multimillion-dollar judgment in favor of the United States.
While Frost’s brokered plea agreement aims to hold him criminally liable for his part in a fraudulent investment scheme and tax fraud, he had already admitted in 2024 to state regulators that he ran investment fraud schemes. Frost has been found liable for doing so in civil court, which has addressed the same misused funds the government cites in its charges.
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.
The brokered plea agreement did not mention an exact figure for the estimated cost to investors. A civil act based on the same claims asked for a judgment of at least $55 million.
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In addition to the hydrogen plant scheme, Frost and a coconspirator knowingly filed false tax returns with materially false deductions and exemptions, his signed plea agreement said, adding that their fraudulent actions resulted in a tax loss of over $8 million to the United States.
Between his charges, Frost also faces up to $850,000 in fines, not including special assessments, forfeitures and restitution, the agreement said.
Frost’s lawyer, Lee Davis, said by phone that he is waiting for the federal court to schedule a time for Frost to enter a guilty plea, but he can’t discuss anything further at this time. Frost didn’t answer a voicemail requesting comment.
The United States Attorney’s Office public information officer was not available for comment and did not respond to a message.
One attorney representing Frost’s former investors, Alex Loftus, said that other civil judgments granted against Frost haven’t been successful in recouping losses. Those judgments, he said, are pieces of paper that say a person owes money.
There was nothing to recover in the past cases, he said, but if Frost pays the $70 million back to the government, the government would have a system for returning funds to investors.
It’s not like the guy took $70 million and has it,” Loftus said by phone. “No, he used the money to pay other things off, including other investors. The money goes around.”
Less than 1% of the nearly $30 million of investments intended for a clean energy project supposedly worth $130 million went toward that purpose, according to the lawsuit Loftus filed in Cook County, Illinois, against Frost, his one-time business partner and other defendants.
Most of the finances allegedly went toward paying off high-interest cash loans that kept the business afloat, Loftus said. The money was also allegedly diverted to support payroll for the accounting firm and other charges unrelated to the investment.
When his accounting firm, Croft & Frost, collapsed in September 2023, a human resources staffer told employees Frost had no money to explain why they would not receive promised cash.
If the plea agreement goes through, the associated criminal judgment against Frost will be more permanent than the civil judgments, Loftus said. Criminal judgments cannot be discharged through bankruptcy.
“The one thing that’s certain is that Mr. Frost is ruined for life, financially,” Loftus said. “It’s all just paper.”
While the federal inquiry was not a surprise to the investors—Frost had introduced criminal documents to assert his right against self-incrimination during the civil litigation—Loftus said everyone was frustrated that criminal action took so long.
“There’s things the government can do if they act very fast,” he said. “That didn’t happen here.”
Whether three months after insolvency or three years, it doesn’t matter, Loftus said. At that point, there’s nothing left to save. Even though Loftus and his clients likely won’t recover any money from Frost, he said, that doesn’t mean the lawsuits—some of which Frost didn’t appear for—are futile.
“I mean, like you agree to take care of people, and, you can’t just quit taking care of them,” he said. “It’s not that much work when you’re punching a pillow.”
Helping the Department of Justice reach a resolution of criminal charges changes the nature of the tax write-offs the former investors can take, he said.
“So that’s the bare minimum,” he said. “And then, God willing, I find somebody else to sue, and we can all make money, me and the investors.”
Frost’s plea agreement would functionally be an admission of liability in the civil case, Loftus said, which has been submitted to a judge to determine whether to end the case early and levy a civil judgment against Frost.
Pat Dougherty, 66, said by phone that he invested in one of Frost’s ventures and is part of the Illinois class-action lawsuit. Three days ago, he didn’t have a prayer, but with the news of the negotiated plea agreement, he has a new glimmer of hope.
The judgment would mean that Frost won’t make another nickel his whole life, because whatever he makes would be seized, Doughtery said by phone. It might be a pipe dream, but he thinks there’s a chance Frost’s parents step in and help.
“How does the Frost family feel about their son going to prison, possibly, for 45 years?” he said. “We’ve seen them step up and buy out his properties.
An attorney for Frost’s parents did not immediately respond to a message left Thursday evening.
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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