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Ex-advisor to admit he bilked Tim Duncan in multi-million dollar deal

March 31, 2017 GMT

Tim Duncan’s former financial advisor has agreed to admit that he defrauded the retired Spurs star in a multi-million dollar investment deal.

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

The FBI alleges 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.

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

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Banks, who was Gameday’s board chairman, collected unauthorized commissions and payments based on these loans for his personal use, the FBI has alleged. The company also benefited from another pro basketball star’s money, that of Kevin Garnett, who retired from the NBA in September.

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 in advance of the plea. The defense claimed that though 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 prosecutors and defense lawyers agree that Banks was Duncan’s financial advisor until Banks stopped working for CSI Capital Management Inc. in 2007. In 2011, CSI sold its investment business and transferred its clients, including Duncan, to SunTrust.

Banks 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 of it to Gameday. Among other things, Duncan was told he’d get monthly payments of 12 percent annual interest for the loan, the prosecution’s factual basis filing said.

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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, the firm’s CEO, that Garnett needed back $8 million he had 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 the monthly interest payments he was promised. Comerica has not attempted 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,” the defense document states.

gcontreras@express-news.net

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