Former NBA player sentenced 9 years in jail for role in Ponzi Scheme
Former NBA player sentenced 9 years in jail for role in
Ponzi Scheme
Former NBA Player and CEO of The George Group Sentenced
to Nine Years in Prison for Role in A $2 Million Ponzi Scheme
TRENTON, N.J. –
C. Tate George, former NBA basketball player and the CEO
of purported real estate development firm The George Group, was sentenced to 108 months in prison for his role in orchestrating a $2 million investment
fraud scheme, U.S. Attorney Paul J. Fishman announced.
After a three-week trial before U.S. District Judge Mary
L. Cooper September 2013, a jury deliberated for four hours before convicting
George, 47, of Newark, New Jersey, of all of four counts of the indictment.
Judge Cooper imposed the sentence today in Trenton federal court.
“Those who perpetrate Ponzi schemes shamelessly trade on
relationships with those who trust them,” U.S. Attorney Fishman said. “In this
case, George relied on his sports stardom to attract unwitting investors. His
crimes justified today’s lengthy sentence.”
“By shamelessly cashing in on his celebrity C. Tate
George stole $2 million from investors who trusted him as a former NBA
athlete,” FBI-Newark Special Agent in Charge Richard M. Frankel said. “George
used the money to pay other investors in the Ponzi-style scheme and lined his
pockets with the rest, funding extensive renovations on his home, paying for his
daughter’s sixteenth birthday party and producing a reality video about
himself.”
According to documents filed in this case and evidence
presented at trial:
George, a former player for the New Jersey Nets and
Milwaukee Bucks professional basketball teams, held himself out as the CEO of
The George Group and claimed to have more than $500 million in assets under
management. He pitched prospective investors, including several former
professional athletes, to invest with the firm and told them their money would
be used to fund The George Group’s purchase and development of real estate
development projects, including projects in Connecticut and New Jersey. George
represented to some prospective investors that their funds would be held in an
attorney trust account and personally guaranteed the return of their
investments, with interest.
Based on George’s representations, investors invested
more than $2 million in The George Group between 2005 and 2011, which he
deposited in both the firm’s and his personal bank account. Instead of using
investments to fund real estate development projects as promised, George used
the money from new investors to pay existing investors in Ponzi-scheme fashion,
as well as paying for his daughter’s sixteenth birthday party, extensive
renovations on his New Jersey home (that has since been foreclosed), the
mortgage on a New Jersey home, the mortgage on a Florida home, taxes to the
IRS, and traffic tickets. The defendant gave money to family members and
friends. He also spent $2,905 for a reality video about himself – a “sizzle
reel” for “The Tate Show” – which was made available on YouTube. The George
Group had virtually no income-generating operations.
During the sentencing proceeding, prosecutors asserted
George had presented the court with fraudulent character witness letters. The
defendant claimed the letters, which contained suspicious similarities, were
sent to the court in support of a more lenient sentence. Some of the
individuals who purportedly sent the letters signed declarations stating that
they did not write the letters nor did they authorize the letters to be sent to
the court on their behalf.
In addition to prison time, Judge Cooper also sentenced
George to three years of supervised release, ordered him to $2.55 million in
restitution and entered a forfeiture money judgment of $2.55 million.
U.S. Attorney Fishman credited special agents of the FBI,
under the direction of Special Agent in Charge Richard M. Frankel; postal
inspectors of the U.S. Postal Inspection Service, under the direction of Postal
Inspector in Charge Maria L. Kelokates; and criminal investigators with the
U.S. Attorney’s Office, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys
Joseph B. Shumofsky and Zach Intrater of the U.S. Attorney’s Office Criminal
Division in Newark.
Source – FBI
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Monday, January 25, 2016
