Bernie Madoff ... Tate George?

It's been a spate of bad news for UConn basketball lately. The latest: Tate George has been arrested and charged with operating a Ponzi scheme.

Here's the release sent out this morning by Paul Fishman, U.S. Attorney from New Jersey:

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.