Afternoon update, includes Finch response: Former UConn basketball star Tate George, part of a development team for the planned Seaview Plaza retail center for the East End, surrendered this morning to federal authorities in connection with an alleged investment fraud scheme. See Justice Department news release below followed by Mayor Bill Finch’s response, Mary-Jane Foster’s reaction and the development announcement that appeared in OIB two years ago. The mayor says George’s role in the development relationship was primarily public relations. If that’s the case it wasn’t emphasized in the announcement two years ago. And gee, if George’s role is public relations, the latest revelations show he’s doing a hell of a job.
FORMER NBA PLAYER AND CEO OF THE GEORGE GROUP CHARGED IN PONZI SCHEME
NEWARK, N.J. – C. Tate George, former NBA basketball player and the chief executive officer (CEO) of purported real estate development firm, The George Group, surrendered this morning to federal authorities for allegedly orchestrating a more than $2 million investment fraud scheme, U.S. Attorney Paul J. Fishman announced.
George, 43, of Newark, surrendered in Newark to special agents of the FBI and postal inspectors of the U.S. Postal Inspection Service (USPIS) on a criminal complaint charging him with one count of wire fraud. He is scheduled to appear this afternoon before U.S. Magistrate Judge Patty Shwartz in Newark federal court.
According to the criminal complaint unsealed today:
George, who once played for the New Jersey Nets and Milwaukee Bucks, held himself out as the CEO of The George Group, claiming to have more than $500 million in assets under management. George pitched prospective investors, including several former professional athletes, to invest with the firm. George represented to these prospective investors that their money would be used to fund The George Group’s purchase and development of real estate development projects, including projects in Florida, Illinois, Connecticut and New Jersey. George represented to some prospective investors that their funds would be held in an attorney escrow 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 March 2011, which he deposited in both the firm’s and his personal bank account. 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. In reality, The George Group had virtually no income generating operations.
If convicted, George faces a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward, and postal inspectors of the USPIS, under the direction of Postal Inspector in Charge Philip R. Bartlett, for their work in the continuing investigation.
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 charge and allegations in the complaint 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. For more information about the task force visit: www.stopfraud.gov.
“Simon Konover Development Corporation, an affiliate of The Simon Konover Company, is the principal member of the Seaview Plaza development project in Bridgeport and the moving force behind the development. Simon Konover Development Corporation does have a limited business relationship with The George Group solely with respect to the Seaview Plaza development in Bridgeport and The George Group’s primary role has been to provide public relations for the project. The Simon Konover Company has a stellar reputation as a competent developer in our state with over 50 years of history, having earned a reputation of having the highest business standards. On behalf of the Port Authority, I have spoken today with James Wakim, President of The Simon Konover Company, and have been assured that they will give serious and swift consideration to examining their relationship with The George Group. Mr. Wakim stated that they are surprised and dismayed by the revelation and will take all appropriate steps. I have also spoken with Port authority officials and have no reason to believe that this revelation would do anything to impede the progress of this project.”
Democratic Mayoral candidate Mary-Jane Foster today said Mayor Finch cannot hide behind Simon Konover on the Seaview Plaza deal.
Foster stated, “Mayor Finch and Donald Eversley have demonstrated one more time why we need a change of administration in Bridgeport. Today’s revelations regarding Tate Georges’ ponzi scheme show that Eversley and Finch were asleep at the wheel. They announced a deal with the George Group and did no due diligence. Tate George had no money to invest in this project and the City would have known this if they did their research.
In addition, how long has the City known that Tate George was being investigated? Is this the real reason there has been no progress on the Seaview Plaza deal? The mayor once again has been caught lying to the East End residents and the city at large.
As Mayor this level of incompetence and deception will end and we will put together a team of professionals that actually brings jobs and economic development to this wonderful city.”
From OIB two years ago, Tate George development announcement:
Mayor Bill Finch and Economic Development Director Donald Eversley announced a development agreement with the Simon Konover Company and a partner company headed by Tate George, former UConn basketball star, to revitalize a piece of the old Carpenter Steel site in the East End.
This is the first significant economic development initiative Finch can call his own. Let’s hope Tate performs a little more magic than the last hoop star that announced a big deal for the city. See Finch news release below:
The Simon Konover Company and The George Group LLC Chosen to Develop Seaview Plaza
Joint Project by Bridgeport Port Authority and City of Bridgeport to Yield Retail/Commercial and Public Access for former Carpenter Steel Site
BRIDGEPORT, CT (September 10, 2009) – The Bridgeport Port Authority and the City of Bridgeport have selected a proposal by The Simon Konover Company of West Hartford, Conn., and The George Group, LLC of New Jersey & Florida to develop the remaining unused 15.8 acre portion of the former Carpenter Steel site into a 152,000 square foot mixed-use commercial/retail center.
The announcement was made during a press conference today in the Mayor’s Conference Room, City Hall Annex, 999 Broad St.
Located at the intersection of Stratford and Seaview Avenues in the City’s East End, the project, to be named Seaview Plaza, is expected to generate hundreds of new jobs, provide a home for both existing and new Bridgeport businesses, generate significant tax revenues and lease fees to the Port & City, and add much needed retail services to the adjoining neighborhoods.
“This is a great day for Bridgeport and the East End,” said Mayor Bill Finch. “This project will restore both first-class retail and waterfront access to a neighborhood that has been deprived of both, for many years. We’re pleased to have two very enthusiastic development partners put their stamp on this part of the City.”
The Seaview Plaza plan includes an anchor grocery, pharmacy, a waterfront restaurant, a gas station & convenience store, and opportunities for multiple smaller retail and commercial/office uses. Also planned are a waterfront park for recreation and fishing and a community center.
“This is the fruit of a year-long planning process and a competitive Request for Proposals, with great input from the East End NRZ committee and the state of Connecticut,” said Donald Eversley, Bridgeport’s Director of Planning & Economic Development, who coined the name “Seaview Plaza” and programmed the overall concept for the development. “The visibility, desirable location and easy access from I-95 will also give the development a citywide and regional draw to help ensure its success.”
The Connecticut Departments of Environmental Protection, Economic & Community Development, and Transportation were all instrumental in shaping the uses for this site that was until recently considered as a location for a container barge shipping operation.
“Too often, retail and commercial development overlooks under-served urban communities and markets,” said Simon Konover, Chairman of the Board of The Simon Konover Company. “Many developers tend to build in suburban areas and miss the opportunity to strengthen our cities by putting underutilized properties back into productive use, and supporting smart-growth strategies that create sustainable communities. Our effort seeks to change that model.”
“While we intend to deliver a first-class retail and small office center to serve the city’s needs, we want to create a model that provides business opportunities, jobs, community open space, and a place for the neighborhood to shop and enjoy,” added Tate George, the principal of The George Group. “We believe that our project will play an important role in helping create a development that will serve both the financial interests of the city and enhance the social fabric of the community.”
In the coming months, the Bridgeport Port Authority and The Simon Konover-George team will negotiate a land development agreement, setting out all the parameters for the development. Once the Port Authority Board of Directors approves the plan, The Simon Konover-George team will undertake a local and state permitting process, which is expected to be completed by early next summer. During that time, the developers plan to reach out to national, regional and local retailers, seek their commitments for space, and close financing on the deal. Construction would begin immediately thereafter, and plans are to open the first set of stores by late summer 2011.
“We are excited about Bridgeport and appreciate the leadership shown by Mayor Finch, Donald Eversley and Port Authority Chairman Denis O’Malley,” said Konover. “And we believe retailers will feel the same way and make this a success for everyone in the community.”
About The Simon Konover Company
The Simon Konover Company and its affiliates have developed and managed retail centers, commercial buildings, market-rate apartments and affordable housing facilities throughout the state and across the northeast. Current projects include a new retail center in Holyoke, MA; the Dye House mill reconstruction in Manchester, CT; and a multi-use center with retail, office and residential components in East Lyme, CT. For more information about The Simon Konover Company, go to www.simonkonover.com
About The George Group
The George Group (owned by former UConn basketball star Tate George) is presently developing projects including Baxter Terrace in Newark, NJ; the Targeted Neighborhood Abandoned and Vacant Properties Restoration Project in the West Ward of Newark, NJ; and the Arcadian Gardens site in East Orange, NJ. For more information about The George Group, go to www.thegeorgegroup.net