This morning in San Antonio, 49-year-old Charles Augustus Banks, IV, an executive with Gameday Entertainment, LLC (Gameday), admitted to defrauding former San Antonio Spurs star Tim Duncan of millions of dollars. The announcement came from United States Attorney Richard Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
“Mr. Banks is now a confessed felon,” Duncan said a statement after the guilty plea was announced. “I will continue to cooperate with the U.S. Attorneys’ Office and Mr. Banks’ probation officer, at their request. I greatly appreciate the work of the Department of Justice and others who have seen the wrongs committed and helped me take action in the hope that others will never have to go through this. While I have much I would like to say about this whole matter, I am following the request of my counsel and withholding comment until the June sentencing date.”
According to the superseding indictment in this case, Banks encouraged the Duncan to loan $7.5 million to Gameday in 2012. Subsequently, Banks encouraged the Duncan to personally guarantee another $6 million loan made to Gameday by Comerica Bank in 2013. During this time frame, Banks was Chairman of the Board of Gameday and personally benefitted, in the form of millions of dollars in loans and commissions, from the proceeds of these loans made to Gameday.
Federal authorities arrested Banks on Sept. 9, 2016 in San Antonio after a grand jury indicted him on two counts of wire fraud. Each count carries a penalty of up to 20 years in federal prison. Banks was released in September on the day of his arrest on $1 million bond and originally pleaded not guilty. Banks was a high profile businessman in the world of California and Napa wine throughout the last decade. In 2006 he purchased and became a co-owner of Oakville’s Screaming Eagle with sports magnate Stan Kroenke, owner of the Los Angeles Rams. Banks departed the winery and partnership with Kroenke in 2009. He later founded Terroir Capital, an investment firm with stakes in wineries from Sonoma to Santa Barbara. Banks met Duncan in 1998 during the basketballer’s rookie season with the Spurs. Later he became a CSI Capital Management financial adviser to Duncan.
Appearing before United Stated District Judge Fred Biery this morning, Banks pleaded guilty “to count two of the superseding indictment pending against him–wire fraud. By pleading guilty, Banks admittedly manipulated the victim into guaranteeing Gameday’s $6 million debt by misrepresenting the true nature of the transaction. Furthermore, Banks failed to fully disclose the commissions, payments and loans he was receiving from Gameday that were specifically tied to these transactions. On June 26, 2013, Banks also caused two pages relating to the $6M loan guarantee and subordination agreements, which contained his victim’s signature, to be faxed from San Antonio to Bank’s employees in California and Comerica bank employees in California.”
Banks remains on bond pending sentencing scheduled for 9:00am on June 27, 2017. He faces up to 20 years in federal prison, a fine of up to $250,000 and restitution to his victim. The FBI is conducting this investigation. Assistant United States Attorney Gregory J. Surovic and Tom Moore are prosecuting this case on behalf of the Government.
Duncan alleged that Banks agreed that the money he invested would be repaid over five years at 12 percent interest and that Banks collected a 20 percent fee that he did not agree to. According to Wine Spectator, Banks told them “when the suit was filed that Duncan agreed to certain minimum investment periods but then tried to cash out early. “I knew that Tim was unhappy because he wanted to get out of some of his investments after his divorce,” he said. “But we’ve got some terrific investments and I’m not going to let Tim Duncan or anyone else bully me into changing the fund and possibly hurting other investors.”
Federal prosecutors eventually filed four charges of fraud against Banks for the deal with Duncan with the indictment stating Banks “arranged for [Duncan] to sign an agreement guaranteeing the new line of credit and subordinating his own security interests.” Banks “advised [Duncan] that the agreement that he was entering into was a modification of his earlier $7.5 million loan and effectively reduced his exposure by $1.5 million should Gameday default on the loan.” But in court it was shown the new agreement created an additional $6 million liability for Duncan.