In federal court in Texas, Charles Banks, the former financial adviser to ex-NBA star Tim Duncan, has pleaded guilty to wire fraud. Banks admitted to misleading Duncan into guaranteeing a $6M loan to a company that had financial connections to the ex-advisor.
Duncan, who retired from professional basketball in 2016, claims that he lost more than $20M through deals he was involved in because of Banks. The two first started working together in 1997 when Banks was employed with CSI Capital Management Inc. and Duncan was an NBA rookie. After Banks left the firm he continued working with Banks.
Banks encouraged Duncan to lend a company, Gameday Entertainment, $7.5M. The company then obtained a $6M bank loan using what Duncan contends was his forged signature. Banks was Gameday’s chairman at the time.
Aside from Gameday, Banks advised Duncan to invest in a number of investment funds and other ventures that the ex-financial adviser controlled or was involved in. In 2015, Duncan sued Banks in federal court alleging “egregious” breaches of trust.
Last year, the US Securities and Exchange Commission charged Charles Banks with bilking Duncan. According to the regulator, Banks misappropriated about $543K from the athlete, took an undisclosed $225K fee from the investment, and secretly siphoned $15K from every $75K monthly interest payment that Duncan made over two years.
Now, the ex-investment adviser faces up to 20 years in prison, a $250K fine, and he could be ordered to pay restitution to Duncan. The former NBA star has said that Banks assured him that he was helping Duncan’s family build “long-term financial security.” Instead, contends Duncan, the ex-financial adviser used their relationship for personal gain while he suffered “substantial loss.”
At Shepherd Smith Edwards and Kantas, LTD LLP, our Texas securities fraud law firm represents high net worth individual investors, retail investors, and institutional investors in trying to recoup their losses. Contact us today and ask for your free case consultation.
Tim Duncan’s former financial adviser pleads guilty to defrauding ex-Spurs, CBS, April 4, 2017
Spurs’ Tim Duncan sues financial advisor for more than $1 million, Sports Illustrated, January 30, 2015