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Winery Owner Charles Banks Indicted in Federal Court

September 12, 2016

In a surprising turn for a onetime rising star in the wine industry, Charles A. Banks walked into a San Antonio courthouse wearing handcuffs Friday after surrendering to authorities. Two days earlier, a federal grand jury had indicted the financial advisor and founder of Terroir Capital—which owns or manages more than a dozen wineries in California, New Zealand, South Africa and Burgundy—on two counts of wire fraud, each of which carries a maximum penalty of 20 years in federal prison. The case stems from allegations made by former NBA star Tim Duncan, a longtime Banks client, who now says he was duped out of millions of dollars in various investments Banks made on his behalf.

Banks first met Duncan in 1998, while he worked as a financial advisor for pro athletes at CSI Capital Management. Wine was a hobby, but in 2000 Banks invested in a new Santa Barbara winery called Jonata. In 2006, he and real-estate developer Stan Kroenke bought Napa Valley’s Screaming Eagle.

After Banks left both of those wineries, he founded Terroir Capital, inviting a select group to invest in building a winery company from scratch. He has assembled a portfolio of wine brands that range from legendary Napa winery Mayacamas to Santa Barbara pioneer Qupé—producing a total of 500,000 cases annually—along with smaller stakes in hotels and restaurants. Banks’s wine portfolio includes Wind Gap, Leviathan, Agharta, Whetstone Wine Cellars, Cultivate Wines, Trinity Hill, Mulderbosch Vineyards, Marvelous, Fable Mountain Vineyards, Qupe and Mayacamas.

After Banks left CSI, he offered Duncan a stake in several investments he was putting together, including a sports merchandising company called Gameday Entertainment, for which Banks serves as chairman, and two funds at Terroir.

But in a lawsuit filed last year, Duncan alleged that Banks cost him millions through questionable advising and suspect deals. He says Banks persuaded him to make a $7.5 million loan to Gameday in 2012, which would be repaid over five years at 12 percent interest. His lawsuit alleges that Gameday failed to make all the payments. Duncan also claims Banks collected a 20% fee that he never agreed to. Wine Spectator has much more on this story.

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