Former NBA Player And CEO Of The George Group Sentenced To Nine Years In Prison For Role In A $2 Million Ponzi Scheme
For Immediate Release
U.S. Attorney's Office, District of New Jersey
TRENTON, N.J. – C. Tate George, former NBA basketball player and the CEO of purported real estate development firm The George Group, was sentenced today 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.
This case is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Defense counsel: Pro se; John A. Azzarello Esq., Morristown, standby counsel
Updated January 21, 2016