C. Tate George, Ponzi Scheme, New Jersey 2013

C. Tate George, a former NBA player and CEO of The George Group, was sentenced to 108 months in prison for orchestrating a $2 million investment fraud scheme, announced U.S. Attorney Paul J. Fishman for the District of New Jersey.

George, 47, of Newark, New Jersey, was convicted of all four counts of the indictment after a three-week trial before U.S. District Judge Mary L. Cooper in September 2013. 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. However, 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.

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 Internal Revenue Service (IRS) and traffic tickets.

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. George held himself out as the CEO of The George Group and claimed to have more than $500 million in assets under management.

George 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.

During the investigation, it was revealed that George gave money to family members and friends and 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.

Defendant C. Tate George, Crime: Four counts of the indictment for orchestrating a $2 million investment fraud scheme, City and State: Newark, New Jersey, Date: September 2013, Sentence: 108 months in prison, $2.55 million restitution, $2.55 million forfeiture money judgment.

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