FORMER NBA PLAYER INDICTED FOR REAL ESTATE PONZI SCHEME

George was indicted on four counts of wire fraud. He was previously charged by criminal complaint with one count of wire fraud. He will be arraigned on the new charges in Newark federal court on a date to be determined.

According to the indictment and other documents filed in this case:

George, a former player for the New Jersey Nets and Milwaukee Bucks, held himself out as the CEO of The George Group and claimed to have more than $500 million in assets under management. He pitched prospective investors, including several former professional athletes, to invest with the firm and told them their money would be used to fund The George Group's purchase and development of real estate development projects, including projects in Connecticut and New Jersey. George represented to some prospective investors that their funds would be held in an attorney trust account and personally guaranteed the return of their investments, with interest.

Based on George's representations, investors invested more than $2 million in The George Group between 2005 and 2011, which he deposited in both the firm's and his personal bank accounts. Instead of using investments to fund real estate development projects as promised, George used the money from new investors to pay existing investors in Ponzi scheme fashion. He also used some of the money for home improvement projects, meals at restaurants, clothing, and gas. The George Group had virtually no income-generating operations.

Under the wire fraud counts with which he is charged, George faces a maximum potential penalty of 20 years in prison and a $250,000 fine for each count.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward; postal inspectors of the USPIS, under the direction of Postal Inspector in Charge Philip R. Bartlett; and the Securities and Exchange Commission, under the direction of George S. Canellos, director of the New York Regional Office, with the investigation leading to the Indictment.

The government is represented by Assistant U.S. Attorney Christopher J. Kelly of the U.S. Attorney's Office Economic Crimes Unit in Newark.

The charges and allegations contained in the indictment are merely accusations and the defendant is considered innocent unless and until proven guilty.

If you believe you are a victim of or otherwise have information concerning this alleged scheme, you are encouraged to contact the FBI at 973-792-3000.

This case was brought in coordination with President Barack Obama's Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

Defense counsel: Thomas R. Ashley Esq., Newark

source: Mortgage Fraud Blog