Monday, April 3, 2017

Financial Advisor Admits to Defrauding Tim Duncan

Posted By on Mon, Apr 3, 2017 at 1:45 PM

click to enlarge JOSH HUSKIN - HTTP://WWW.JOSHHUSKIN.COM/
Tim Duncan's former financial advisor pleaded guilty to two counts of wire fraud in San Antonio federal court Monday.

The charges against Charles Banks stem from investments Duncan allegedly made at his urging when he was still advising the 15-time All Star Spurs player. In fact, the criminal case against Banks dovetailed with lawsuits Duncan filed against his former money man in 2015 claiming Banks had "encouraged, promoted, and hustled" him into investing in a series of bad ventures, including companies that Banks had an interest in or controlled.

Last year, not long after he was indicted in federal court, the U.S. Securities and Exchange Commission slapped Banks a lawsuit that largely echoed Duncan's claims against his former money man.

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

Banks has in the past claimed he stopped advising Duncan after he left CSI in 2007, shortly before the firm was bought and folded into another Atlanta-based bank called SunTrust. According to the criminal indictments filed in court last year, Duncan still thought Banks was managing his money with the bank even though he'd left CSI. That's because, according to prosecutors, Banks regularly approached Duncan "to offer investment advice and encourage him to invest or loan money in projects in which (Banks) was involved.” The feds claim Banks positioned himself as the middleman of sorts between Duncan and SunTrust.

The wire fraud charges against Banks centered mostly on the millions Duncan invested, allegedly at Banks' urging, in a company Banks ran called Gameday Entertainment LLC. Duncan's lawsuit, the criminal indictments, 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 court records, this is what Banks texted Duncan about the deal: "All great news. ... No downside."

Duncan says he discovered millions of dollars in losses when his lawyers looked over his finances as part of his 2013 divorce. Banks is out on bond pending his sentencing later this summer. He faces up to 20 years in federal prison.


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