Former Advisor To NBA’s Tim Duncan Pleads Guilty To $7.5M Fraud

A San Antonio advisor has admitted defrauding a victim, presumed to be retired NBA star Tim Duncan, in a multi-million dollar scheme.

Charles Augustus Banks, IV, 49, an executive with San Antonio-based Game Day Entertainment, pleaded guilty on Monday to one count of wire fraud in the U.S. District Court, Western District of Texas in San Antonio.

While Duncan, a former star forward with the San Antonio Spurs, is not named directly in court documents, he has previously identified himself as a victim of Banks’s scheme.

Banks allegedly persuaded Duncan to invest $7.5 million in a sports team apparel and merchandise company, Gameday Entertainment, falsely telling him that another investor was investing the same amount.

In January 2015, Duncan filed a lawsuit seeking at least $1 million in damages against Banks, claiming that he had been cheated in his investments.

According to a civil complaint filed by the SEC, Banks told Duncan that $5 million of the $15 million total would be used for the company’s ongoing operations, with the remainder paying off Gameday’s existing bank debt, and that the client would have a first lien position on Gameday’s assets.

Banks allegedly knew that there was no other investor, that the full $15 million would not be raised, and that the bank debt would not be paid off, leaving Duncan without the first lien position he was promised.

Instead, Banks allegedly misappropriated nearly $543,000 from Duncan, taking an origination fee  of $225,000 out of his client’s investment, and siphoning $15,000 from each $75,000 monthly interest payment from Gameday to Duncan for approximately two years.

According to the SEC and confirmed by Duncan’s suit, the basketball star never consented to pay Banks a portion of the interest payments, and Banks never disclosed that he received the origination fee.

The SEC also alleges that Banks further deceived Duncan into signing a personal guarantee on a bank line of credit for the company by only sending the signature pages of a personal guarantee and subordination agreement, and then falsely representing the terms of the agreement contained in the other pages.

from FA News http://www.fa-mag.com/news/former-advisor-to-tim-duncan-pleads-guilty-to–7-5-million-fraud-32178.html

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