Jonathan David Frost of Soddy Daisy, Tennessee, turned a Chattanooga accounting practice into a hub for social media promoted investments. He and Paul Thomas Croft owned Croft & Frost, PLLC, a tax preparation and accounting firm, and between January 2021 and September 2023 they raised approximately $64 million from more than 230 investors through promissory notes and membership interests in a network of limited liability companies. Matthew William Dira sold those notes. According to the Securities and Exchange Commission, Dira continued soliciting investors and selling millions of dollars of notes after receiving communications warning him that Croft and Frost were likely running a Ponzi scheme, and earned more than $500,000 in salary and commissions. The SEC charged all three on September 11, 2026 in the Eastern District of Tennessee. It is the smallest of the proceedings against Frost.
The complaint charges Croft and Frost under Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5, and charges Dira under Section 17(a)(2) of the Securities Act and Section 15(a)(1) of the Exchange Act, the broker registration requirement. Frost has consented to a bifurcated judgment, subject to court approval, that would permanently enjoin him and bar him from participating in the issuance, offer or sale of any security other than for his own accounts, with monetary relief deferred. The case continues against Croft and Dira, and the allegations against them are untested.
Six Funds, and What Investors Were Told
The money came in through promissory notes and membership interests in a set of limited liability companies: the Well Fund, the Scorpio Fund, the Taurus Fund, the Capricorn Fund, the Chestnut Fund and the Gemini Fund. Investors were told the capital would fund real estate purchases, loans to small businesses, or the acquisition of an apartment building.
According to the SEC it did none of those things. Croft and Frost are alleged to have misappropriated investor funds to cover the operating expenses of the tax preparation business itself and to finance their own lifestyles, and to have used investor money to make Ponzi-style payments to existing investors. In the related Illinois litigation, investor money was traced to a car collection, a credit card bill running at roughly $27,000 a month, and more than $370,000 paid to a swimming pool contractor in New Jersey.
The accounting firm was the platform, and that matters. A tax preparer sees a client’s entire financial position and is trusted on the assumption of professional competence and professional obligation. An investment offered by the person who files your return arrives already credentialed in a way no cold call ever could.
The Hydrogen Plant
The promissory notes were not the only offering. A separate scheme concerned a facility that would supposedly use solar energy to extract hydrogen from water, a project promoted as worth around $130 million.
According to a class action filed in Cook County, Illinois in 2023, roughly $30 million was raised for it, and less than one percent of that went toward the project. The lawsuit alleges about 99 percent of investor funds went to propping up other businesses and paying personal expenses, including servicing high-interest cash loans that were keeping the firm afloat and covering payroll at the accounting practice. The federal criminal information records one investor putting $147,000 into the hydrogen plant on May 12, 2021, money prosecutors say went to personal expenses.
A civil judgment of nearly $50 million was entered against Frost and three companies tied to him in that Illinois case. Chicago attorney Alex Loftus, who represents the investors, has said it is unlikely they will recover anything, because earlier civil judgments have not succeeded in recouping losses. His observation about the criminal case is the more useful one: a criminal judgment cannot be discharged in bankruptcy, which civil ones can.
Four Thousand Tax Returns
The count that has drawn least attention may be the largest. Frost pleaded guilty to conspiracy to defraud the United States, and the federal information alleges that he and his associates prepared some 4,000 to 5,000 fraudulent income tax returns, collectively costing the government more than $8.1 million.
Those returns were prepared through a firm whose clients came to it precisely to have their taxes handled properly. Frost and the firm were subsequently barred from practising before the Internal Revenue Service. For a client whose return was among those thousands, the exposure is personal and separate from any investment loss.
Paul Croft, Founder and Executive Chairman
Croft has drawn less attention than his partner, which does not reflect his position in the firm. He was its founder and executive chairman. A biography published on his own website, preserved after the collapse, recorded that he had dreamed of earning a seven figure income by the age of forty and had achieved it at thirty seven, attributing the result to building lifelong relationships and advancing his clients personal and financial goals.
The two men also promoted at least one other venture together. A staff photograph published by the Chattanooga Times Free Press shows Frost and Croft appearing in an investor pitch for a separate business called Rhino Onward International. After the accounting firm shut down, a local broadcaster contacted another company the pair had founded and received no response.
Croft has not pleaded guilty to anything and has not settled with the Commission. The allegations against him are untested, and he is entitled to contest them.
When the Firm Collapsed, Staff Found Out From HR
Croft & Frost collapsed in September 2023. According to reporting on the aftermath, a human resources staffer told employees that Frost had no money, which was the explanation offered for why they would not receive pay they had been promised.
The pay had been failing for months before that. According to emails obtained by the Chattanooga Times Free Press, the firm stopped paying staff on time from May 2023 onward. Employees were told their overdue paychecks from August 11, August 25 and September 8 would arrive by direct deposit that Friday. The closure email cited ongoing challenges and a decline in the company’s financial performance.
James Greiner, a client relationship manager at the firm for a year and a half, told a local broadcaster he had not been shocked by the layoff but was surprised it came immediately before the third quarter tax deadline for clients. He estimated the firm lost about half its workforce between the start of June and the second week of September as people left over the missed pay. The firm’s phones, website and social media accounts were taken down. Clients with concerns about their filings, records or prepaid fees were advised to complain to the state CPA board through the Tennessee Department of Commerce and Insurance.
A Tennessee regulator later described the matter as one of the more egregious violations of the public trust he had seen. The employees, the tax clients and the investors were all left in the same position at the same moment, and the SEC’s complaint covers conduct through September 2023, the month the firm stopped functioning.
What Frost Faces
Frost pleaded guilty on February 11, 2026 to conspiracy to commit wire fraud, conspiracy to commit money laundering, and conspiracy to defraud the United States. The wire fraud and money laundering conspiracies each carry up to 20 years, and the tax conspiracy up to five. He faces up to $850,000 in fines, and his plea agreement provides that unless otherwise negotiated he could owe the government no less than $70 million.
He is free on a $10,000 bond. Sentencing was set for August 7, 2026 and was subsequently reset at his lawyer’s request. His criminal defence attorney, Lee Davis, has said Frost will not comment publicly while the criminal case is ongoing. Frost’s parents were named in a fraudulent transfer claim over their purchase of his foreclosed properties and were dismissed from that complaint in April 2026. The FBI has established a victim website and email address for investors in the hydrogen plant scheme.
Why the Broker Registration Count Against Dira Matters
Dira is charged under Section 15(a)(1), which requires anyone effecting securities transactions for others to register as a broker. Registration brings supervision, conduct rules, examination requirements and a public disciplinary record searchable on BrokerCheck. None of that applied here.
The charge under Section 17(a)(2) is negligence-based, meaning the SEC does not allege he intended to deceive anyone. But the sequence in the complaint is what an investor would want to know: he was warned, in writing, that the operation was likely a Ponzi scheme, and he kept selling. Every note sold after that warning went to someone who had received no warning at all, and he earned more than $500,000 across the period.
Dira Is Still Giving Wealth Advice Online
Dira has not gone quiet. He maintains an Instagram account with roughly 55,000 followers on which he describes himself as a performance coach and founder of The Dira Group, and invites followers to text a keyword to receive what the account calls a free wealth map. His LinkedIn profile lists The Dira Group, a location in Glen Allen, Virginia, an education at Methodist University, and specialities in planning for high net worth individuals and closely held businesses.
The same Instagram account carries a post from the earlier period opening with the line that one of the core values at Croft and Frost is, which is how the account itself connects him to the firm. A separate federal civil case in the Eastern District of Tennessee, docketed 1:24-cv-00140, records that other individuals working with Frost, including Mr. Dira, helped recruit investors into the Well Fund. That filing also states that Frost and Croft collected over forty million dollars from investors through the shell companies and diverted the funds to other operations.
None of this is unlawful in itself. The SEC has not sought an emergency order restraining him, the charge against him under Section 17(a)(2) is negligence-based rather than an allegation of intent, and the allegations remain untested. But a man the Commission says sold millions of dollars of promissory notes while unregistered, and kept selling after being warned the operation was probably a Ponzi scheme, is currently offering financial guidance to tens of thousands of people who will not have read the complaint.
Conclusion
Paul Croft founded a Chattanooga accounting practice and served as its executive chairman, having written on his own website that he dreamed of a seven figure income by forty and reached it at thirty seven. Jonathan Frost turned that practice into a hub for investments promoted on social media. Together, the SEC says, they raised $64 million from more than 230 people through promissory notes and funds named after star signs, on promises of real estate, small business lending and an apartment building, and spent it on their own lifestyles, on the overheads of the accounting firm, and on paying earlier investors. They pitched at least one further venture together, Rhino Onward International.
That is one of several frauds. A separate hydrogen plant scheme took roughly $30 million on a project promoted as worth $130 million, and less than one percent of the money reached it. The firm prepared four to five thousand fraudulent tax returns, costing the Treasury more than $8.1 million, and Frost and the firm were barred from practising before the IRS. Investor money went to a car collection, a $27,000 monthly credit card bill and over $370,000 to a swimming pool contractor in New Jersey.
The staff were not paid from May 2023 and lost three consecutive paydays before an HR employee told them there was no money. Half the workforce had already left. The firm shut down days before the third quarter tax deadline, took down its phones, website and social accounts, and left clients to complain to the state CPA board. A Tennessee regulator called it one of the more egregious violations of the public trust he had seen.
Matthew Dira sold the notes, took more than $500,000 in salary and commissions, and the Commission says he carried on after being warned in writing that the operation was probably a Ponzi scheme. He now offers financial guidance to roughly 55,000 Instagram followers. Frost pleaded guilty in February to three federal conspiracies, faces up to twenty years on two of them, may owe the government no less than $70 million, and is free on a $10,000 bond with sentencing reset. Croft has pleaded guilty to nothing and has not settled. A nearly $50 million civil judgment already sits against Frost in Illinois, and the lawyer who won it says the investors are unlikely to see any of it.
