A federal jury deliberated for four hours before returning a guilty verdict against a former NBA player who masterminded a real estate Ponzi scheme that swindled victims out of at least $2 million. Tate George, who once played for the New Jersey Nets and Milwaukee Bucks, was convicted on four counts of wire fraud. George, who was taken into custody immediately following the verdict, could face up to twenty years in federal prison for each count. He is scheduled to be sentenced on January 16, 2014.
Beginning in 2005, George owned and operated The George Group ("TGG"), which was touted to potential investors as a successful real estate development company that had a portfolio exceeding $500 million. The company was said to specialize in commercial and residential development financing, and represented that investor funds would be safeguarded in an attorney escrow account. In return for their investment, investors received promissory notes with varying terms reflecting their investment amount and length. In total, George raised more than $2 million from investors - including some former professional athletes.
However, contrary to George's representations, TGG did not have $500 million under management and investor funds were not used to fund real estate development projects. Rather, TGG had virtually no income-generating operations, and George used TGG to run a classic Ponzi scheme by using investor funds for a variety of unauthorized purposes that included the payment of principal and interest to existing investors. George also used investor funds to sustain a lavish lifestyle that included throwing a Sweet 16 party for his daughter, the mortgage and extensive renovations on his New Jersey home (that has since been foreclosed), taxes to the IRS, and traffic tickets. George also spent $2,905 for a reality video about himself (a “sizzle reel” for “The Tate Show,” is available on YouTube).
While George spent four years in the NBA, his most memorable playing moment arguably came on a buzzer-beater in the third round of the 1990 NCAA tournament:
For more news and analysis of Ponzi schemes, visit Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.
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