Don’t hate the player: How a former NBA star built a real estate fraud scheme around his basketball ties
From the New York website: The shot that made Tate George was one of those moments that make you question the laws of time and space. It was March 21, 1990. The University of Connecticut was up against Clemson University in the Sweet 16 round of March Madness. Clemson was leading, 70-69, with exactly one second remaining on the game clock. UConn’s Scott Burrell had the ball at the baseline.
To win, the 6-foot-5 guard would have to somehow get the ball past Clemson’s 6-foot-11 Elden Campbell, who stood in front of him with arms outstretched. He would have to throw it across the entire court and a UConn player would have no more than a split second to catch, aim and shoot. The odds of UConn scoring were near zero.
The referee blew the whistle. Burrell hurled the ball. It seemed to almost graze Campbell’s hands, but didn’t change course. The ball flew across the court in a high arc. Deep inside Clemson’s half, closer to the sideline than the basket, George, a guard at UConn, jumped up and caught it. He had to arch backwards, and as he landed on one leg, he briefly looked like he had lost his balance. But he didn’t fall.
George now had his back to the basket, about 15 feet away. He spun around and shot the ball over a defender. The ball went in, accompanied by the sound of the final buzzer.
“The shot’s gonna count!” the announcer yelled. “The shot by Tate George wins it!”
George, arms raised, was swallowed by a wave of teammates and cheerleaders.
“Stunning doesn’t get close to describing it,” the New York Daily News wrote the following day. “Miraculous? That might fall short, too.”
I. The Screen
Seventeen years later, Brevin Knight immediately thought of the shot when a mutual friend told him about an investment opportunity with Tate George’s real estate development firm, the George Group. “Growing up, I knew him from watching basketball,” Knight later testified in court. “We all know the big shot that he hit when he was at UConn.”
It was June 2007. Knight, a 32-year-old point guard for the Memphis Grizzlies, was at that point in his NBA career when players start thinking about their financial future after the game. On a phone call arranged by the mutual friend, George told Knight that he planned to develop 12 townhomes on an empty lot in a ramshackle part of East Orange, N.J., just around the corner from where Knight grew up. George needed $300,000 to close on the land purchase, he said.
“I thought it would be very good for families in that area to have viable housing,” Knight later said, according to documents filed in federal court in New Jersey. “So it was something, a way for me to give back to the city but also have an investment.” The only catch: George needed the money right away. Otherwise, he’d lose the deal.
[vision_pullquote style=”4″ align=”right”] “As you know; first in gets the deal.” [/vision_pullquote] Knight’s financial adviser, the former NFL player Reggie Wilkes, saw Tate’s urgency to get the cash as a “red flag” and advised him not to invest. But Knight had already made up his mind. On June 25, George signed a promissory note guaranteeing the loan would be paid back by December, with 12 percent interest. Knight wired the money to an escrow account.
December came and went. In January, Knight emailed George for an update. George responded that there was a hold-up in the city of East Orange, and that he needed a couple more months. Then the excuses started piling up. George couldn’t send the money because he was on a mission trip. Then, a family vacation. A notarized release of funds document somehow got lost in the mail.
In July 2008, six months after the loan was due, Wilkes threatened to sue. George, who rarely returned calls, texts or emails, immediately responded: “The approach like I stole the money is ridiculous,” he wrote. “This project will give generational wealth to both Brevin and my families.” He ended the email by promising to send the money “ASAP when I return from out of town with my family.”
No money came and Knight finally lost his patience. It was the offseason, and he was coaching a summer basketball camp in Essex County. One day, he drove to George’s house in nearby West Orange. George’s car was parked outside, but no one answered the door.
“I was in the process of almost kicking in his front door when my father drove up and let me know that wasn’t the route that we should go in dealing with this situation,” Knight recalled in court. “I grew up in the inner city. Could be the route of we’re going to fight, I’m going to deal with this physically. But I have a family, I have other people to worry about.” In September 2008, Knight filed a civil suit against George. George agreed to settle for $450,000, but never paid.
News of the suit, filed in public records, made it to the desk of Louis Mellinger. After taking out a second mortgage on his home to come up with the funds, Mellinger, an attorney, had invested $150,000 with George, mere weeks after Knight. George had promised to pay him back within three months, topped by a hefty fee. When the money didn’t come, Mellinger started digging around.
He found other victims, and other lawsuits. Ralph Ramsey, an engineer from Long Island, and his friend Dwayne Taylor, a trader at Bear Stearns in Manhattan, had invested $100,000 with George in September 2006. He had told them the money would go toward a single-family development in Chicago, and would be mere show money, held in an escrow account to satisfy lenders. He guaranteed repayment after three months with 25 percent interest. Three months passed, and then a year.
There was Naiima Horsley-Fauntleroy, an employee of the city of East Orange who used her inheritance to invest $50,000 with George. The profits George promised her, she reckoned, would help her pay off law school debt. Those profits never came.
It was always a similar dance. George would contact the investors through mutual friends and offer them sky-high interest on investments that they were told carried no risk. He claimed to have developed $500 million worth of real estate and told them family members and NBA players invested with him. He signed promissory notes personally guaranteeing the loans along with a mysterious rich backer in Florida named Howard Trachtenberg.
Some, such as Mellinger, later said they had a bad feeling when they first met George. But those were the heydays of the housing boom, when absurd returns didn’t seem so absurd. At any rate, the investors had little time to decide. “As you know; first in gets the deal,” George wrote to Ramsey and Taylor in September 2006.
After the money was wired and the repayment deadline blown, the excuses began. First, George would point to delays in the project. He would be slow to answer calls or emails. When investors kept pressing for repayment, his checks were inevitably lost in the mail. “What happened to the check?” Knight wrote in an email to George on Sept. 9, 2009 – more than two years after he had wired over the $300,000. “I thought you got it by now, bro,” George responded. “Please send me your address again and when I return from out of the country I will overnight it to you.”
Some sued. Others pleaded, telling George about the hardships he was causing them. Most never saw their money again.
“I had become aware that there are other people who had made investments and who weren’t paid,” Mellinger later recalled. “Tate lost his house in Florida, Tate lost his house in West Orange. I believe that something bad happened to my money.”
In 2011, federal agents arrested George on charges of wire fraud, claiming he had stolen $2.5 million from a dozen investors. In some cases much of it was gone within hours of George receiving it. He spent it on his relatives and his girlfriend, on renovations to his house, on new air conditioning units, on his white Chrysler, on his tax debt and his mortgage, according to prosecutors.
At one point, George spent $2,900 of his investors’ money on a trailer for a reality show he wanted to pitch to TV networks. The four-minute video shows George playing golf, schmoozing with actor Forest Whitaker and then-Newark Mayor Cory Booker and goofing around with NBA star Chucky Atkins. He has giant-baby looks: tall and jowly, with a youthful face and big eyes. Standing on Times Square in a suit, he flashes two fingers – “V” for victory.
“People say a lot about Tate George. Tate this, Tate that, Tate over here, Tate over there,” George says in the video, flashing a grin. “It’s all things Tate. Let’s go watch.”
II. The Dribble
The shot in the 1990 UConn-Clemson game, still widely considered the single greatest play in college basketball history, elevated a 22-year-old George to national fame. That summer, the New Jersey Nets chose him with the 22nd pick of the draft. An old photograph captures the moment: George bows his head, smiling, as friends and family jump up around him. It seemed like a perfect union: the immensely gifted son of Newark returning to play for his home state. His contract would pay him $4.7 million over five years.
“He had a great family structure, he had friends. He had a support structure on the outside, so he wasn’t one of those guys you (worried) about,” George’s college coach Jim Calhoun told the Hartford Courant in 2013. “He did have swagger, he had a lot of confidence in himself and he parlayed that into an NBA career.”
The NBA career didn’t go as hoped. George averaged 10.6 minutes per game in his first season and 14.8 in his second as a substitute, but saw his playing time slip in the third year. The Nets tried to trade George but couldn’t find any takers. A few months later, they cut him. An odyssey through lower-tier leagues in the U.S. and Europe followed. In 2000, at 32, he retired from the game.
[vision_pullquote style=”4″ align=””] “I believe that something bad happened to my money.” [/vision_pullquote]George made a living playing basketball for a decade. But he never amassed the kind of wealth some other players of his generation did. As sports marketing grew in sophistication and Michael Jordan made basketball a global sport, league revenues ballooned. So did player salaries. Between 1984 (the year Jordan entered the league) and 2008, the NBA’s salary cap grew more than eightfold in inflation-adjusted terms. Even role players could become seriously rich.
The sudden wealth was a mixed blessing. Many players grew up poor and had little experience handling large sums of money, and they tended to burn through it fast. In 2009, Sports Illustrated published a report claiming 60 percent of NBA players were broke within five years of retirement. Things were worse in the NFL, where a staggering 78 percent of players were in serious financial trouble two years after quitting the game. The main culprits: expensive lifestyles, divorces and bad financial advice.
Faced with this financial uncertainty, many athletes turned to real estate as a stable investment. The list of former star athletes that launched their own development firms includes Lakers legend Magic Johnson, former Cowboy Emmitt Smith, former Spur David Robinson, former Met Mo Vaughn and many more. Others chose to invest in outside ventures. New York Knicks’ Carmelo Anthony, for example, recently bought a stake in the South Bronx residential development by Somerset Partners and the Chetrit Group at 2401 Third Avenue, according to sources.
Real estate is “straightforward,” said David Gross, a business manager for several athletes, including the Lakers’ Luol Deng. “It makes sense and they feel like there’s no hocus-pocus, no voodoo where one day it’s going to disappear like some of the financial instruments that they are pitched.”
George was no Magic Johnson. But he was an important figure in northern New Jersey, and knew how to exercise his clout. Other NBA players knew him, and so did politicians and business leaders.
In January 2006, George signed a contract to buy a parcel in Elizabeth. His partner on the deal was Michael Chu’di Ejekam of the Bayrock Group, a development firm known for co-developing the Trump Soho, and also for being embroiled in several fraud scandals. The deal ultimately fell apart, but George would continue to list it among his many ongoing projects.
As George picked up new projects and began to look for investors, he played himself up as an old hand. He called himself CEO, president and chair of the board of directors of the George Group. “Tate George personally established the stable and substantial development portfolio of the company that presently exceeds $500 million,” his prospectus read. It listed completed condo developments in Florida, along with images and location. (The developments exist, but George was never involved.)
One of George’s early investors, an engineer named Ralph Ramsey, recalled that George claimed family members and NBA players invested with him, which put him at ease. “Tate said that Chudi worked for a company named Bayrock and that was connected with Donald Trump, and he essentially facilitated a lot of the investment opportunities connected with Trump,” Ramsey said in court.
Many of George’s investors came had some connections to pro basketball. Knight was a player. Horsley-Fauntleroy, the city worker with law school debt, and Mellinger, the attorney, were both friends with players. George’s most famous victim was Charlie Villanueva, who recently played for the Dallas Mavericks.
[vision_pullquote style=”4″ align=””] What I’m doing is not self-serving, but other-serving.” [/vision_pullquote]Bank records and witness testimony show that George targeted these investors primarily to get his personal finances in order.
“I need Brevin [Knight]’s money because I owe money on the house,” Nicholas Nassiff, an urban planner who worked with George, overheard George telling his accountant over the phone in mid-2007. Knight’s money, wired in June, was gone in less than two months. When Horsley-Fauntleroy wired over $47,000 on August 15, 2007, George’s account balance was $-4,777.14.
In hindsight, his frauds seem obvious. When Villanueva invested $250,000 in a Bridgeport, Conn., development in 2010, George persuaded him to wire the money directly to his personal account rather into an escrow. He claimed his partner on the project, the Simon Konover Company, preferred it that way. When Villanueva’s financial advisers asked for a financial statement from George, he faked his former accountant’s letterhead and sent a document with the headline “Assest and Labilties” (sic). It claimed George was worth over $12 million.
An executive at Simon Konover declined to comment. Victims and former associates named in court documents either declined to comment, did not respond to requests for comment or could not be reached.
Had his investors run a simple search of court or property records, they would have known better. So why didn’t they?
Court records indicate that some investors more or less blindly trusted him because of his ties to the NBA community. Villanueva described the group of former UConn players that made it to the NBA as a “fraternity” that both he and George belonged to. Before investing, he asked Chucky Atkins about George. Atkins, Villanueva’s former teammate at the Detroit Pistons, vouched for George. That seemed to seal the deal.
“He was known for being a kid who came from the area and made it,” recalled Horsley-Fauntleroy. “Yeah. He was – is well known and trusted – was trusted.”
The charming, sociable George was a master at exploiting that trust. “People just assume athletes are stupid,” said one financial adviser to athletes, speaking on condition of anonymity. “But from my experience their level of sophistication is no different than any other vocation, especially if your background is not related to finance. You have a whole cadre angling at taking of advantage of them. They’re just targets their entire life, and that makes them defensive. It forces them to double down on personal relationships and that leads to bad outcomes sometimes.”
Even the New York Times fell for George. A July 2010 article titled “After Sports Careers, Vying in the Real Estate Arena” profiled George along with other athletes. George is quoted talking about his Bridgeport project. He told the author that he had “turned down about 75 other opportunities in Connecticut in the last decade.”
“What I’m doing is not self-serving, but other-serving,” George said. “When you don’t work for fanfare, you can get a lot more done.” Fourteen months later, the FBI came calling.
III. The Shot
As George’s fraud trial kicked off in September 2013, prosecutors began referring to his fraud as a Ponzi scheme. But real Ponzi schemes are elaborate. They pay off high returns to early investors, who spread the word and enable the fraud to proliferate. In George’s case, the investors who took the witness stand never made any money, and most quickly realized they had been hoodwinked.
George’s scheme – if you can even call it that – was the real-world equivalent of a Hail Mary play. As an athlete, he became famous for pulling a victory out of the jaws of certain defeat. As a real estate fraudster, and later in court, he displayed the same confidence in his own ability to beat crushing odds. He always seemed to believe he could somehow find that next investor just in time, or to uncover exculpatory evidence. “I’m back to ‘The Shot’ days,” George said at one court hearing in September 2013. “I’ve got to hit it again.”
Rather than plead for leniency, George pressed his innocence. He blamed former business partners and employees. An intern had sent the check to the wrong address. His partner, Bayrock’s Ejekam, had run off with the money.
The evidence against George was overwhelming. On Sept. 30, 2013, the jury found him guilty of four counts of wire fraud.
As George appealed – once, then twice – his defense became increasingly creative. In December 2014, he fired his public defender and began representing himself. In rambling and typo-ridden letters to U.S. District Judge Mary Cooper, he accused the government of a cover-up. He claimed the prosecutors had made a mistake arresting him for a crime he didn’t commit, and then tried to hide it by withholding evidence and pressing witnesses to lie.
He had been sitting in Monmouth County jail since September 2013, and as his repeated requests for bail were turned down he grew exasperated.
“If the plan by the government and/or this legal system; is to have me sit in jail until I agree to give up my fight of innocence (…) then the Government has a better chance of me dying in jail first,” he wrote to Judge Cooper on March 23, 2015.
On Jan. 21, 2016, a jury in Camden’s federal court sentenced George to nine years in prison. A day later, George filed a motion to appeal the sentence and the verdict. The case is ongoing.
In an email, relayed by his fiancée Nicoline Steinert, George told TRD he believes prosecutors first arrested him as a pawn in a corruption case against Cory Booker, then Newark’s mayor and now a U.S. senator. Once they realized there was no case, he claims, federal prosecutors tried to cover their tracks by fabricating a case against him and pressing witnesses to lie.
He described himself as the victim of a racist judicial system. In October, George and three other black men convicted of white-collar crimes – former Maryland official and convicted fraudster David M. Robinson, Whitney Houston’s former producer and convicted Ponzi scheme mastermind Charles Huggins and gospel singer-turned financial fraudster Michael Winans – penned a “national concept paper” titled “The Dark Side of Justice.”
“Apparently, some over-zealous prosecutors conduct a modern-day witch hunt to find successful minority businessmen to prosecute and convict by any means necessary to put a gold star on their ego wall, so to speak,” they wrote in the paper, which was sent to news outlets. George also filed a lawsuit against the government and in 2015 he sued his former partner Ejekam.
The Ejekam suit landed George in the middle of the bizarre proxy fight between Jody Kriss and Felix Sater, the two estranged former principals of the Bayrock Group who have been suing each other for years. George initially filed his suit without an attorney, but in early February 2017, Sean Mack of law firm Pashman Stein filed a revised complaint on George’s behalf. Jody Kriss, the CEO of development firm East River Partners who worked with Ejekam at Bayrock, was now named a co-defendant.
“The Tate lawsuit is a complete sham,” Kriss’ lawyer, Bradley Simon, said in a statement to TRD. “We have reason to believe it is being funded by Felix Sater who has filed a plethora of lawsuits in retaliation for the RICO suit brought by Mr. Kriss in the Southern District of New York.”
Why did Mack take up a long-shot case over a small sum of money for a broke client? Asked by phone, Mack stayed silent for a while. “I don’t think I’ve got a …” he said, breaking off the sentence before adding: “Why do I take on any cases?” When TRD asked Mack if Sater is paying for the lawsuit to get at Kriss, he declined to comment. Sater’s attorney claimed that his client didn’t pay for the suit but that he “did pay for a press release email about the suit.”
George still represents himself in his criminal appeal, working from the Fort Dix prison in New Hanover Township, N.J. Steinert, a 29-year-old restaurant manager from Queens, is helping him. “I’ve been sending a lot of certified mail,” she quipped at an October meeting in Midtown Manhattan.
Steinert met George at a bar in 2012, when he was out on bail and awaiting a verdict. She soon found out about the fraud trial but recalled that George “was always confident that he had the documentation to not get convicted.”
Steinert concedes that “mistakes were made,” but says the matter should be civil, not criminal. “That’s what the government is good at, making criminals out of black men,” she said. “The issue is the system.” The fact that most of George’s victims are also black only shows that “they like to play black men against other black men,” she added.
One March 9, the federal appeals court in Philadelphia submitted George’s case on the briefs, meaning there will be no oral argument. It’s unclear when the court will reach a verdict. If he loses, Steinert said, he could shoot for the Supreme Court. She claimed to be optimistic, but seemed under no illusions about his odds. “I’m still going to be young when he comes out,” she said.
After George leaves prison – he is scheduled for release in 2022 – he will still owe his victims millions. On July 21, 2016, the government auctioned off the only thing of value George appeared to still own: a Volvo. It sold for $4,700.