Former NBA Star Faces Sentencing For $7 Million Ponzi Scheme

Sentencing for a former NBA star convicted of a $7 million Ponzi scheme is scheduled to begin today in a Connecticut federal court.  Tate George, a former standout college and professional basketball player, was convicted on four counts of wire fraud by a federal jury more than two years ago.  George, who played professional basketball for the New Jersey Nets and Milwaukee Bucks, has successfully delayed his sentencing by nearly two years as he dismissed his former attorneys and chose to represent himself in the sentencing phase.  George faces a maximum prison sentence of twenty years, but federal sentencing guidelines will result in a lower recommended sentence.  The sentencing is expected to last two days. 

Beginning in 2005, George owned and operated The George Group ("TGG"), which solicited potential investors  based on promises it was 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 $7 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).

After his conviction in October 2013, Tate lodged a series of unsuccessful post-trial motions arguing for his acquittal on various grounds and later gained court approval to represent himself.  Allegations also surfaced that Tate had sent correspondence while behind bars to some of his victims soliciting them to invest with him again. 

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: