Former NBA Player Tate George Charged in $2M Scam

Former New Jersey Nets and Milwaukee Bucks player Tate George made his first appearance in federal court Friday in Newark after he surrendered to FBI agents on charges the ex-NBAer orchestrated a more than $2 million investment fraud scheme.

George, 43, of Newark, entered the courtroom shackled, in a gray suit with a blue shirt and winked to family members sitting in the first row. He answered, "I do," when asked by U.S. Magistrate Patty Shwartz if he understood his rights.

Prosecutors say George was the purported chief executive officer of The George Group, a corporation out of Connecticut with offices in Newark, that claimed to have more than $500 million in assets. George pitched prospective investors, including several former professional athletes, to buy into the firm, according to a five-page criminal complaint unsealed Friday. He then apparently told them he was using the cash to invest in real estate projects in Connecticut, Florida, Illinois and New Jersey.

But, according to officials, he used the cash to pay existing investors and to fund personal home improvement projects, restaurant meals, clothing and gas.

"In reality, The George Group had virtually no income-generating operations," said Rebekah Carmichael, a spokeswoman for the U.S. Attorney's Office.

George surrendered to authorities Friday morning. He was charged with one count of wire fraud.

Thomas Ashley, George's attorney, said his client is innocent. "We will plead not guilty," he said outside the courtroom. "All these charges are clearly defensible." George's family members, including his mother, declined to comment.

Shwartz set bail at $250,000. George was released on that bail after posting a bond secured by his mother's house on 13th Street in Newark. Shwartz also ordered George to turn over a list of his ongoing real estate projects, but declined the prosecutor's request to disclose the names of the project's clients. 

The criminal complaint claims George enticed investors through written materials between 2005 and March 2011. He then directed investors to the company's website, according to officials. The George Group site is now blank and reads, "This website is currently under construction."

Federal authorities said George provided investors with promissory notes that reflected the amount of their investment and a schedule, which varied from a matter of days to up to one year for the payment of interest and the return of investors' principal.

The complaint states George also told investors that their cash would be maintained in an attorney escrow account, but George allegedly moved the money into his corporation's bank accounts and his personal account.

George told one investor, "B.K.," in 2007, he planned to use his cash to bankroll a real estate development project in East Orange, according to the complaint.

He then allegedly issued a promissory note to "B.K." and agreed to pay $18,000 in interest no later than Jan. 3, 2008. As part of the agreement, on or about July 2, 2007, "B.K." sent George $300,000 via a wire transfer to a bank account in the name of a Connecticut attorney affiliated with The George Group, according to the complaint.

The next day, the entire $300,000 apparently was wired from the attorney's bank account to a George Group account. George then allegedly wired $6,000 of that cash to a New Jersey bank account held by "M.B.," an alleged associate of George.

Authorities declined to name "B.K." or "M.B."

When questioned by federal authorities in March about the $300,000, George said he spent the entire amount on the East Orange project, according to the complaint.

George attended the University of Connecticut, where was known for making the game-winning shot against Clemson University in the third round of the 1990 NCAA tournament. A year later, George started his four-year NBA career and played 177 games with the Nets and then the Bucks.

If convicted, George faces 20 years in prison.