A former college basketball standout who later played professionally for the New Jersey Nets and Milwaukee Bucks is scheduled to make an initial appearance after being charged with operating a $2 million Ponzi scheme. C. Tate George, 43, was indicted in a federal complaint unsealed today that charged him with one count of wire fraud. Wire fraud carries a maximum statutory penalty of twenty years in federal prison, along with criminal monetary penalties and restitution.
From 2005 until 2011, the indictment alleges that Tate solicited more than $2 million from investors who included several former professional athletes. Investors were told that George's company, The George Group ("TGG"), was a profitable business that engaged in real estate development ventures in Florida, Illinois, Connecticut, and New Jersey. TGG also maintained a website that described its strategy as follows:
The George Group specializes in both commercial and residential development financing including equity contributions. We have amassed a network of quality real estate and business investors that we are able to share with developers in areas where there is no conflict with one of our existing projects.
Additionally, the website made claims that the company had a real estate development portfolio in excess of $500 million. A cached version of the website page is here. The website has since been taken down.
Investors were given promissory notes reflecting their investment amount and length, which varied from several days to a year. Investors were also assured that their funds would be maintained in an attorney escrow account. Contrary to these representations, George deposited investor funds into his personal bank accounts, and authorities alleged that George and TGG had virtually no income-generating operations. Instead, George operated a typical Ponzi scheme, using investor funds to fund principal and interest payments to existing investors and to sustain a lavish lifestyle.
George's is scheduled to appear before a federal magistrate Friday afternoon.
A copy of the Indictment is here.