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Tim Duncan’s Former Financial Advisor Charles Banks IV Expected To Plead Guilty To Wire Fraud On Monday

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SAN ANTONIO — Tim Duncan’s former financial advisor has agreed to admit defrauding the retired Spurs star in a multi-million dollar investment deal, the Virgin Islands Free Press has learned.

Charles A. Banks IV, 49, of Atlanta, is set to plead guilty to wire fraud Monday in federal court in Texas, and could get up to 20 years in federal prison, according to court records.

The FBI alleges that Banks, largely in text messages, misrepresented the terms of a $7.5 million investment loan Duncan made to a sports merchandise company, Gameday Entertainment LLC. The company was linked to Banks and also involved another investor, former pro basketball star Kevin Garnett, who retired from the NBA in September.

Prosecutors say Banks also duped Duncan into backing another $6 million line of credit in 2013 for Gameday that further increased the future NBA Hall-of-Famer’s potential liability.

Banks, who was Gameday’s board chairman, collected unauthorized commissions and payments based on these loans for his personal use, the FBI has alleged.

Duncan sued Banks, accusing him of misrepresentations that led to more than $20 million in losses on investments in other business ventures,. Some of those civil claims are still pending, and the U.S. Securities and Exchange Commission also sued Banks in Atlanta in September, making similar allegations.

Though Banks is pleading guilty, the feds and Banks filed separate factual basis statements for it. The defense claimed that although Banks was chairman of Gameday, the company had no board of directors and he was not involved in day-to-day management of the operation, which was the responsibility of CEO Jeff Neal. Neal cooperated with the FBI and has not been charged, testimony at a prior hearing showed.

Both factual basis filings say Banks was Duncan’s financial advisor when Banks was with CSI Capital Management Inc., until Banks left that company in 2007. In 2011, CSI sold its investment business and transferred its clients to SunTrust, including Duncan.

Banks’ filing says he developed investments on his own in the hotel and wine industry, and Duncan opted to work with him “multiple times between 2005 and 2010, investing millions of dollars in multiple funds controlled by Banks, and earning substantial returns,” one of Banks’ lawyers, John E. Murphy, wrote in the factual basis.

Banks is expected to admit as part of his plea that Duncan was provided with a $10 million line of credit from Comerica Bank, and that Banks convinced Duncan to loan $7.5 million from that credit line to Gameday. Among other things, Duncan was told he’d get monthly interest payments at 12 percent annual interest for the loan, the prosecution’s factual basis filing said.

Prosecutors contend Banks knowingly gave Duncan misleading information that allowed the $10 million line of credit to be modified in 2013, including claiming to Duncan that Gameday was “crushing” and that everything was “turning out better than I hoped.”

In reality, the FBI says, Gameday was struggling and in need of capital, and Banks had been telling Neal that Garnett needed back $8 million he pumped into Gameday through a separate credit-line investment loan backed by Comerica Bank. Duncan has claimed Banks misled him about how much Garnett was pitching in for Gameday. The modification on Duncan’s portion also let Banks get larger cuts from the overall deal than Duncan had agreed to, according to the prosecution’s factual basis.

Gameday was dissolved in January, so the $7.5 million Duncan loaned Gameday is in default, and now Duncan can’t collect on it, the prosecution’s filing said. And, Duncan is liable for $6 million to Comerica Bank for the 2013 loan guarantee, prosecutors contend.

Banks’ factual basis filing says Neal, not Banks, negotiated the initial investment contract Duncan signed, and that for more than two years, Duncan did receive monthly interest payments at an annual rate of 12 percent. Comerica has not attempt to collect on the $6 million that Duncan guaranteed, the defense document states.

Garnett “has reached an agreement with Comerica which has put to rest Comerica’s claims based upon the guarantees, and extinguishes any exposure (Duncan) may have had on that guarantee.

http://vifreepress.com/2016/09/charles-banks-high-priced-attorneys-arrange-skip-court-appearance-tim-duncan-fraud-case/

http://vifreepress.com/2016/09/fax-sent-duncan-playing-nba-game-might-banks-undoing/

http://vifreepress.com/2016/09/charles-banks-accused-stealing-20-million-tim-duncan-indicted-today/

http://vifreepress.com/2015/08/tim-duncans-25-million-federal-lawsuit-over-lost-money-going-nowhere-fast/

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The Author

John McCarthy

John McCarthy

John McCarthy has been reporting on the U.S. Virgin Islands since 1989. He is originally from Detroit, Michigan.

2 Comments

  1. afterwhilecrocodile
    April 2, 2017 at 11:27 AM — Reply

    Tim Duncan lawyers need to be going after Charles Banks IV ‘s assets as Tim will probably collect .40 cents on the dollar if any…….

  2. Mike towers
    February 12, 2018 at 10:38 PM — Reply

    He would have been better just to invest the money in a diversified mutual fund portfolio. His 24 million would be worth almost 100 million

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