A high-profile investor in wineries and co-owner of Mayacamas Vineyards in Yountville faces trial early next year, with the possibility of significant prison time, on federal charges of wire fraud.
Federal authorities arrested Charles Banks, 48, on Sept. 9 in San Antonio after a grand jury indicted him on two counts of wire fraud. The charges stem from accusations that Banks defrauded retired professional basketball player Tim Duncan, who played 19 seasons San Antonio Spurs, of several million dollars.
Each count carries a penalty of up to 20 years in federal prison. Banks was released the day of his arrest on $1 million bond. He has since pleaded not guilty.
A rising powerhouse in the world of California and Napa wine throughout the last decade, Banks garnered a high profile with his 2006 purchase and co-ownership of Oakville’s Screaming Eagle with sports magnate Stan Kroenke, owner of the Los Angeles Rams. Banks departed the winery and partnership with Kroenke in 2009. He later founded Terroir Capital, an investment firm with stakes in wineries from Sonoma to Santa Barbara.
People are also reading…
During this period, Banks also served as financial adviser to Duncan. The two met in 1998 during Duncan’s rookie season with the San Antonio Spurs.
At the time, Banks was president of CSI Capital Management, an investment advisory firm in California, and recruited Duncan as a client. Banks left the firm in 2007 but would continue to advise Duncan on investment opportunities.
According to the indictment, Banks advised Duncan in 2012 to provide a loan of $7.5 million to Gameday Entertainment, a sports merchandising and event promotion company where Banks served as chairman of the board. He later encouraged Duncan to personally guarantee an additional $6 million loan from Comerica Bank to Gameday.
The indictment accuses Banks of manipulating Duncan by misinterpreting the true nature of the transactions and states that Banks personally benefited from the proceeds of the loans made to Gameday, receiving millions of dollars in the form of loans and commissions, which he then failed to disclose fully.
Duncan filed suit against Banks in 2015, accusing him of mishandling more than $20 million of his investments. Among these investments were several Duncan made in Terroir Capital. Litigation involving Terroir was ultimately settled outside of the courts for an undisclosed amount.
Kevin McGee, chief operating officer and general counsel of Terroir Capital, said that despite the lawsuit and settlement, Duncan has retained his interests with the firm.
What effect Banks’ indictment and the looming specter of prison time may have on his stakes in Napa’s wine industry and throughout the state remains unclear. The current criminal charges relayed in the indictment pertain only to Duncan’s investments in Gameday and do not involve Terroir or its wineries. McGee said so far the charges against Banks “have had zero impact on [Terroir’s] business.”
Even if Banks is convicted, “Terroir will continue,” McGee said.
In 2013, Banks partnered with the Schottenstein family, Ohio-based retail billionaires, to purchase Mayacamas Vineyards following the retirement of longtime owner and winemaker Bob Travers. Banks has since undertaken an extensive campaign to revitalize the property, setting his sights on a long tenure at its helm.
Mayacamas did not respond to questions regarding what a conviction for Banks might mean for the future of the vineyard.
McGee confirmed Banks’ ownership of Mayacamas is a personal investment and that the vineyard is not owned by Terroir Capital.
The case is currently set for jury selection and trial in April of next year before U.S. District Judge Fred Biery in San Antonio.
Banks’ legal team includes former federal prosecutor John E. Murphy, who said he is confident the team will secure Banks’ acquittal. Murphy described the case as “simply a business dealing with a couple of parties seeing things differently.”
Murphy did not make Banks available for comment.
In a statement released the day of Banks’ arrest Duncan said, “I originally filed my lawsuits against Charles Banks to stop him from doing to others what he [did] to me and my family.”