NZ to revoke fraudulent US investor's ownership of winery

New Zealand's Overseas Investment Office (OIO) is considering removing US wine fund manager Charles Banks as an owner of Trinity Hill winery because he is "not of good character."

Banks, whose company - Terrior Winery Fund - owns a controlling share in NZ's Trinity Hill, has pleaded guilty to fraud charges in the United States.

The Terroir Winery Fund was granted consent to acquire Hawkes Bay winery Trinity Hill in 2014 - a condition of the consent required 'individuals with control' of the Terroir Winery Fund to remain of good character, the OIO has said in a statement.

"The OIO has met with Terroir Winery Fund's representatives to make it clear that in our view Mr Banks is unlikely to meet his on-going obligation to remain of good character.

"If Mr Banks is not of good character, then we will seek to have him to be removed as an individual with control of sensitive land in New Zealand," it said.

Banks, a former financial advisor to NBA player Tim Duncan, was indicted in September. He pleaded guilty on Monday to one count of wire fraud in a San Antonio, Texas, court house. The charge carries a maximum penalty of 20 years in federal prison.

Banks allegedly sent misleading text messages inducing Duncan to fund a $7.5 million loan and a separate $6 million line of credit to sports-merchandising company Gameday Entertainment when Banks was part owner and chairman of the Gameday board. That same day, the Securities and Exchange Commission sued Banks on related charges in federal court.

The criminal charges followed two lawsuits that Duncan had filed against Banks in 2015, alleging Banks’ bad advice - including his investment in Terroir Capital, the winery investment group founded by Banks - had cost him $20 million, 

Terroir made Banks a celebrity in the California wine industry over the past decade - it has stakes worth an estimated $200 million in some of California’s highest-profile wineries, including Qupé and Wind Gap.

Banks announced on Monday morning that he has stepped down from “day to day management of Terroir.” Convicted felons cannot manage wineries in the US. However, they can be partial owners, provided they don’t have management authority.

Kevin McGee, Terroir’s former chief operating officer, has been promoted to chief executive officer. McGee said there “hasn’t really been an impact” on Terroir’s wineries so far. “Sales are up,” he told The San Francisco Chronicle. “The businesses are doing better than they ever have.”

Banks' sentencing hearing is scheduled for June 27.