Charles Banks, the once high-profile investor who rose to the top rungs of the Napa Valley wine world as a co-owner of Screaming Eagle and later Mayacamas Vineyards before receiving a four-year prison sentence for wire fraud, will sell off his shares in Mayacamas, effectively severing his most significant ties to the region’s wine industry.
Banks’ downfall began almost one year ago with his arrest in San Antonio on four counts of felony wire fraud stemming from accusations that he defrauded retired San Antonio Spurs star Tim Duncan out of several million dollars while acting as Duncan’s financial adviser.
Following his guilty plea to one count of wire fraud in April, Banks was sentenced to four years in federal prison and ordered to pay restitution of more than $7.5 million to Duncan.
First reported by WineBusiness.com, Banks’ sale of his holdings in Mayacamas to the Schottenstein family, Ohio-based retail giants with whom he co-owned the storied Mount Veeder winery, came as he prepared to begin serving his sentence this week. Banks has remained free since posting $1 million bond the day after his arrest.
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According to a motion from Banks’ legal team filed with the U.S. District Court for the Western District of Texas last month, and approved by U.S. District Judge Fred Biery, the proceeds from Banks’ sale of 50 shares of stock in CBSchott, Inc., which owns Mayacamas and Lokoya Vineyards in Napa, will in part go toward the restitution owed to Duncan, plus interest. The Lokoya Vineyards cited in the motion are farmed by Mayacamas and are unrelated to the Jackson Family Wines-owned Lokoya winery in St. Helena.
The motion states that the settlement agreement allowing Banks to sell his shares – the terms remain confidential – was the result of “months of simultaneously hard-fought and delicate negotiations involving a very rare, luxury asset, complex relationships, and stakeholders and potential bidders across several states.”
Partnering with the Schottensteins to purchase Mayacamas in 2013, Banks reportedly set his sights on revitalizing the historic property and had at one time eyed a lengthy future leading the winery. But with his arrest and indictment last September, a series of civil suits have flown between the co-owners, with Banks seeking to dissolve the partnership and the Schottensteins accusing him of misusing Mayacamas funds.
According to the motion from Banks’ team, the confidential settlement and its approval have brought an end to the civil litigation.
“It brings peace to one of defendant’s largest business relationships, thus preventing indirectly creating new victims from this process,” the motion reads.
And while the sale of his shares in CBSchott, Inc. brings a close to his largest involvement in the Napa wine world, the saga of Banks’ dealings with Duncan and the courts continues, as he and his legal team have appealed his sentencing, including the restitution to be paid to Duncan.
“Essentially we think that the guidelines were not calculated correctly … and we think the restitution should not have been ordered,” Banks’ attorney John E. Murphy said Tuesday. An approximate timeline for the appeals process has yet to be determined.