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Fraudster of the Week -- Charles Banks, Ex-Advisor to Retired San Antonio Spurs Star Tim Duncan

Posted  April 7, 2017

By the C|C Whistleblower Lawyer Team

On Monday, financial advisor Charles A. Banks IV pleaded guilty to wire fraud after duping NBA legend Tim Duncan into entering a shoddy multi-million dollar investment deal.  Banks, a 49-year-old wine executive who runs Terroir Capital, could face up to 20 years in prison.

In 2012, Banks convinced Duncan to invest $7.5 million into Gameday Merchandising LLC, a flailing sports apparel company that was struggling to meet obligations to various clients, including the Washington Nationals.  To invest in the company, Duncan took out a $10 million line of credit from Comerica Bank, loaning $7.5 million to Gameday.  Gameday’s CEO later obtained an additional $6 million line of credit from Comerica.  When Gameday ultimately collapsed, Duncan lost his $7.5 million investment and was left on the hook for Gameday’s $6 million loan.

Despite Gameday’s business struggles, Banks—Gameday’s chairman—painted a rosy picture of the company’s performance.  Text messages exchanged between Banks and Duncan while the San Antonio Spurs were playing the Miami Heat in the 2013 NBA Finals demonstrate that Banks deliberately misled Duncan about the nature of his investment.  Banks falsely told Duncan that Gameday was “crushing it,” and that the additional $6 million credit line operated to “pay[] down” Duncan’s original $7.5 million loan.

While accepting Banks’s guilty plea, U.S. District Judge Fred Biery asked Banks to clarify his “crushing it” text message, calling it a “term of art.”  Banks explained, “it meant that the company was doing very well at the time.”  Judge Biery quipped that Banks’s message was “[w]hat they call nowadays ‘alternative facts.’  That is another term of art.”

Tagged in: Catch of the Week, Financial and Investment Fraud,