NZ winery investor Charles Banks pleads guilty to fraud charges

Charles Banks, the famed California winery investor who owns a controlling share in NZ's Trinity Hill, has pleaded guilty to fraud charges.

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.

Terroir bought a 67% stake in Hawkes Bay's Trinity Hill vineyard in 2014.  

“It’s an amazing place with amazing people. Why wouldn’t you want to do business [in New Zealand]?” Banks said.

Trinity Hill owns about 200 acres of vineyards, and was among the first to plant grapes in the Hawkes Bay Gimblett Gravels region in 1993.

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.