A former professional basketball player will spend the next nine years in federal prison after being convicted of operating a Ponzi scheme that duped victims - including other professional athletes - out of more than $2 million. Tate George, 47, was a former first round draft pick in the NBA whose long fall from grace culminated in his 2011 arrest on fraud charges. In a stunning development at the culmination of a six-day sentencing hearing, federal prosecutors disclosed that George had apparently forged several character reference letters which were sent to U.S. District Judge following George's 2013 conviction on four wire fraud charges. In addition to the sentence, George was also ordered to pay $2.55 million in restitution as well as $2.5 million in forfeiture. George had faced a maximum sentence of 20 years.
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.
George maintained his innocence throughout his prosecution, claiming that investor losses were due to "delays" in his projects while also blaming prosecutors for withholding crucial exculpatory evidence. In closing arguments to Judge Cooper on the final day of George's sentencing hearing, a federal prosecutor invoked another basketball great, Michael Jordan, in urging the maximum sentence for George:
“There was a saying about Michael Jordan that you couldn’t stop him — you could only contain him...I submit your honor that is exactly Tate George. ... You know that he will commit more crimes.”
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: