Basketball Player Caught Operating Ponzi Scheme
Tate George played for the University of Connecticut Huskies and later for the New Jersey Nets and the Milwaukee Bucks in the NBA. In 1990 he was the number 22 pick of the New Jersey Nets in the NBA draft. George is best known for his last second game winning shot to clinch the win over Clemson in the third round of the 1990 NCAA basketball tournament. Over four seasons he averaged 4.2 points and 1.8 assists per game. George owned and operated The George Group and has been charged with wire fraud and running a $2 million Ponzi scheme by the Federal Bureau of Investigation, according to Bloomberg and Investment News. If convicted, he could face as much as twenty years in prison for the charges. His bail was set at $250,000 and he used his mother's house in Newark, New Jersey as security for the bail.
According to the FBI allegations, George targeted other professional athletes by pitching his $500 million real estate development portfolio, which in fact was worthless and produced no income to pay investors. As is typical in Ponzi like schemes, George at first used the investors' money to pay former investors when the scam began in 2005. Later, investors' money went to support his lifestyle by paying for back child support payments, mortgages, credit card bills, clothes cars and gas, among other things.
Brevin Knight, a former NBA player, gave George $300,000 in July 2007 to be invested in an East Orange New Jersey real estate project. The investment was supposed to generate $18,000 in interest by January 2008. Knight later file a breach of contract suit over the fraudulent real estate deal and won a $450,000 judgment against George and The George Group. After failing to pay any of the judgment and upon a motion of Knight, U.S. District Judge William Martini ordered that he be arrested. The last indication was that he was to appear and give deposition testimony as to why he had not paid any of the judgment.