Tim Duncan’s Financial Advisor Indicted for Fraud – Mishandles $20 Million

By - September 12, 2016
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Tim Duncan’s ex-financial advisor has been indicted for wire fraud. The San Antonio Spurs sports star who retired last month had sued his former financial advisor Charles Banks in 2015. He alleged that banks had mishandled at least $20 million of his investments.

The lawsuit stated that Banks encouraged Duncan to invest in hotels, wineries and several beauty products, but he did not reveal that Banks had ownership interests in all of them.

Duncan accused the advisor of defrauding him on a loan of $7.5 million to Gameday. This was a company that Banks controlled. That company also received a bank loan with what the Spurs star said was his signature on a financial document that would get him $1.5 million cash and would lower his risk. Banks was accused of using that signature to increase the guarantee exposure of Duncan to $13.5 million.

The FBI has been investigating Banks for over a year. He recently was released after he posted a bond of $50,000 last week. This was five percent of his $1 million bail bond after he showed up in federal court.

One of Duncan’s attorneys stated that the charges on Banks involved about $10 million of the $20 million that Duncan lost in his dealings with the advisor.

According to Banks’ defense attorney, the former financial advisor is a successful business and family man. He said that after the facts come to light, he will be found innocent of wire fraud.

The indictment states that Duncan first met Banks in 1998 when Banks was working for the investment company CSI. Banks became the president in 2000 and left the company in 2007. CSI then was acquired by SunTrust Sports and Entertainment Specialty Group.

According to the indictment, Duncan thought that Banks still was his financial advisor after he was no longer with CSI because Banks talked to Duncan often about investments and to ask him to invest in projects that Banks was working on.

The lawsuit by the SEC contains numerous allegations about Gameday, and accuses Banks of violating securities laws. Some of the accusations are similar to the ones that Duncan has made in his own lawsuit.

Duncan stated that the losses in his lawsuit were from 2005 to 2013 when he was reviewing his finances as part of a 2013 divorce.

The indictment, lawsuit by the SEC and the allegations by Duncan all accuse the advisor of fraud over the Gameday deals. Instead of the investments helping Duncan, the loan of $7.5 million was harmful to him and exposed him to millions in liability.

Duncan also alleges that Banks tricked him into putting $1 million into a cosmetics company that he claimed to be profitable but was actually losing money. He alleges that Banks did not tell him that Metier Tribeca was failing financially, and also that Banks was not going to put his own money into the company, which Duncan says Banks told him he was going to do.

In the past, Banks denied all of Duncan’s allegations. He said that Duncan has made millions off of these deals but that Duncan wanted now to cash out early.

The date has not yet been set for Banks next court appearance.

About Wire Fraud

Federal wire fraud charges focus on the intentional deception for gaining materially. Wire fraud is a form of deception that has to do with using telecommunications equipment, such as TV, radio and Internet. It is distinct from many other types of fraud, including telemarketing fraud and mail fraud.

Wire fraud almost always involves the crossing of state lines, so almost all types of wire fraud are prosecuted by the federal government. In addition to laws that cover wire fraud generally, the law also has special rules about any type of fraud that deals with disasters or emergencies. There also are special rules for wire fraud that involve any financial institution run by the US government.

There are several types of wire fraud charges:

  • General wire fraud, where there is any type of fraud that uses TV, radio, phone or Internet going across state lines without aggravating factors.
  • A special type of wire fraud that is defined for any type of fraud that is made related to any disaster event.
  • Wire fraud that affects financial institutions. Any type of wire fraud that can be shown to be related to the operations of a financial organization may be considered aggravated fraud.

Generally, wire fraud can be punished by a prison sentence of up to 20 years. The level of the fine for wire fraud depends upon the amount of money involved in the original fraud. There have been financial penalties for wire fraud cases that went up as high as $1 million.