Dozens of NBA stars once turned to Charles Augustus Banks IV for guidance on their investing their wealth. Wine lovers also looked to Banks,
Now,
is heading to federal prison for wire fraud in connection with an investment scheme said to have duped former San Antonio Spurs star Tim Duncan out of $7.5 million.
Credit: Lois Norder
Credit: Lois Norder
In late June, a federal judge in Texas sentenced the Atlanta-based investment adviser to 48 months in prison and ordered him to repay Duncan.
In addition, last week,
and industry bar against Banks. The judgment, entered by the federal court in Atlanta, bars Banks from ever again serving as an officer and director of a public company. He also agreed to be barred from the securities industry.
Banks was known as a top adviser to professional athletes through his firm CSI Capital Management, which had branch in Atlanta. He began investing some of his own wealth in wineries, gaining
in the U.S., New Zealand and South Africa.
Banks had other ventures as well, including a sports team apparel and merchandise company, Gameday Entertainment, where Banks was chairman and partial owner. He offered to let Duncan be one of two investors in it, for which each investor would receive 12 percent interest paid monthly, according to court records.
But the SEC's complaint says that Banks made a series of misrepresentations about the investment and allegedly misappropriated funds from his client. According to the agency, Banks told his client that $5 million of the purported $15 million offering would be used for the company's ongoing operations and the rest would pay off debt, but the client would have a first lien on assets.
Banks already knew there was no other investor, the full $15 million would not be raised, and the bank debt would not be paid off, SEC said. And without telling his client, Banks took an undisclosed fee of $225,000 out of the investment and secretly siphoned $15,000 from each $75,000 monthly interest payment to the client for about two years.
Banks also duped the client into signing a personal guarantee on a bank line of credit for the company, SEC said. To get him to sign, Banks directed that only the signature page of the guarantee document be sent to the investor, while falsely representing to him that it would reduce his existing investment risk in Gameday when in fact it increased the risk.
Credit: Lois Norder
Credit: Lois Norder
While its complaint didn't name the client,
Banks had been Duncan's adviser for years, and among the ventures in which Duncan invested were wineries.
Records show that since Banks' arrest in the criminal case, he sold the home he owned on Valley Road in Atlanta for $3.8 million.
Banks isn't the only adviser with Georgia connections accused of duping pro athletes. This case is still pending:
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