Ex-NBA player Tate George indicted in Ponzi case

Reuters News
Posted: Mar 23, 2012 7:24 PM
Ex-NBA player Tate George indicted in Ponzi case

By Jonathan Stempel

(Reuters) - Tate George, a former National Basketball Association player who held himself out as the chief executive of a real estate firm, was indicted on four counts of wire fraud for allegedly running a $2 million Ponzi scheme targeting former professional athletes, prosecutors said.

Friday's indictment by a Newark, New Jersey, grand jury came six months after George, 43, was charged with one count of wire fraud.

George, who lives in Newark, will be arraigned at a future date and faces as much as 20 years in prison and a $250,000 fine on each count. The indictment was announced by U.S. Attorney Paul Fishman in New Jersey.

Thomas Ashley, a lawyer for George, did not return requests for comment.

Prosecutors said George collected more than $2 million between 2005 and 2011 for his firm, the George Group, from investors who believed their money would be used to buy and develop real estate projects, including in Connecticut and New Jersey.

George told some investors that there was "no risk" to their principal and provided some investors with schedules for expected interest payments, according to the indictment.

Instead, prosecutors said George used new money to repay earlier investors, and spent some money on home improvement projects, child support payments, restaurant meals, clothing and gas.

The George Group had virtually no income-generating operations, although the defendant claimed to have more than $500 million of assets under management, prosecutors said.

George was a 1990 first-round draft pick for the New Jersey Nets. The guard played three seasons with the Nets and three games with the Milwaukee Bucks.

Previously, he was a star player at the University of Connecticut. He is remembered for catching a long inbounds pass and hitting a 15-foot jump shot with one second left to give the Huskies a victory over Clemson in the third round of the 1990 NCAA basketball tournament.

The case is U.S. v. George, U.S. District Court, District of New Jersey, No. 12-cr-00204.

(Reporting By Jonathan Stempel in New York; editing by Andre Grenon)