Monday, September 12, 2016

Feds Indict, Sue Tim Duncan's Former Money Man for Fraud

Posted By on Mon, Sep 12, 2016 at 9:30 AM

WIKIMEDIA COMMONS
  • Wikimedia Commons
Last week, things went from bad to worse for Tim Duncan's former financial advisor.

Just last year Duncan twice sued Charles Banks, his former investment advisor, claiming he'd "encouraged, promoted, hustled" the 15-time All Star into investing in a series of bad ventures, including companies that Banks had an interest in or he himself controlled. Then on Friday, as first reported by the Express-News, a federal judge unsealed a two-count wire fraud indictment against Banks after he surrendered to federal authorities here. Not long after his brief appearance in a San Antonio federal courtroom Friday, the U.S. Securities and Exchange Commission came out with a lawsuit alleging several violations of securities laws and echoing many of the claims in Duncan's original lawsuit against his former money man.

Duncan reportedly first met Banks, an investment advisor from Atlanta, in 1998 following his rookie season with the Spurs. At first, Banks worked for and then became president of an Atlanta-based investment firm called CSI. Throughout his time advising Duncan, according to documents filed in court, Banks got him to invest million dollars in hotels, beauty products, sports merchandising and wineries. In his lawsuit, Duncan claims his Banks didn’t disclose that he owned or had financial stakes in many of those entities.

Banks ultimately left CSI in 2007 (after which he claims he stopped advising Duncan), shortly before the firm was bought and folded into another Atlanta-based bank called SunTrust. According to the indictment handed down by a federal grand jury last week, even though Banks had left CSI, Duncan still thought he was managing his money with the bank since Banks regularly approached him "to offer investment advice and encourage him to invest or loan money in projects in which (Banks) was involved.” Banks, according to the indictment, even positioned himself as the middleman of sorts between Duncan and SunTrust. 

The eight-page criminal indictment against Banks centers mostly on the millions Duncan invested, allegedly at Banks' urging, in something called Gameday Entertainment LLC; Banks was the company's chairman. Duncan's lawsuit, the indictment handed down last week, and the SEC suit all claim that Banks defrauded Duncan over a $7.5 million loan to the company that, rather than benefitting Duncan, actually exposed him to millions in liability. (According to the indictment, this is what Banks texted Duncan about the deal: "All great news. ... No downside." 

Duncan claims he discovered the millions of dollars in losses when his lawyers reviewed his finances as part of his 2013 divorce. Banks has denied any allegations of fraud. If convicted, he could face up to 20 years in prison for each charge. He's set to go before a judge later this month. 

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