Judge rejects bid to dismiss insider trading case against Las Vegas sports bettor Bill Walters
NEW YORK — A federal judge has rejected Las Vegas gambler William “Billy” Walters’ bid to dismiss criminal insider trading charges after an FBI agent admitted to leaking details about the probe to reporters.
In a decision Wednesday, U.S. District Judge Kevin Castel in Manhattan said Walters failed to show he was prejudiced by the leaks, and that their “limited effect” on the complex probe into Walters’ alleged illegal conduct weighed against dismissal.
The judge also rejected Walters’ argument that the FBI agent, David Chaves, might have leaked information about other white-collar cases, and that this “history of prosecutorial misconduct” justified dismissal of the indictment.
Castel called the potential for a pattern of leaks by the FBI “concerning,” but said it “would not raise such serious questions about the fundamental fairness of the process that resulted in this indictment.”
Barry Berke, a lawyer for Walters, did not immediately respond on Thursday to requests for comment.
Prosecutors accused Walters of making more than $40 million through insider trading on tips from former Dean Foods Co chairman Tom Davis, in a scheme that entangled Phil Mickelson, the professional golfer.
Mickelson was not accused of wrongdoing, but agreed to pay back more than $1 million that the U.S. Securities and Exchange Commission said he obtained by trading Dean Foods shares.
Davis has pleaded guilty and is cooperating with prosecutors. The leaks are also being probed by the U.S. Department of Justice.
The case is U.S. v. Davis et al, U.S. District Court, Southern District of New York, No. 16-cr-00338.
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Timeline
1985 A sports betting ring known as the "Computer Group" is raided the day before Super Bowl XIX by the FBI. Walters and his colleagues are acquitted of federal charges of conspiracy and illegal interstate transmission of wagering information in 1992.
December 1996 Authorities raid Walters' sports book business in Las Vegas, seizing $2.4 million, after telephone wiretaps lead authorities to three sites in Las Vegas as part of an investigation that started in New York on mob-run bookmaking operations.
Dec. 26, 1996 Walters opens Desert Pines Golf Course with a 50-year lease from the city of Las Vegas.
September 1998 In a controversial land use bid, Walters wins a county lease to develop 155 acres into the Bali Hai golf course using public land south of Mandalay Bay. The final vote, 3 to 0, has four county commissioners abstaining, citing conflicts of interest.
October 1998 A Clark County grand jury indicts Walters and three others on conspiracy and unlawful transactions involving monetary instruments.
1999 Walters buys 160 acres from the city of Las Vegas to build the Royal Links Golf Club under the stipulation that other development be prohibited as it is located next to a sewage treatment plant. Then Deputy City Attorney Thomas Green wrote a memo that pointed out the sale of the land and the water rebates could be "viewed as the Walters Group receiving the property free from the city, together with additional $900,000 in free water."
2002 Money laundering indictments from the raid in 1996 are thrown out by the lower court due to "defects." The attorney general's office appeals to the Nevada Supreme Court, but the high court agrees with the lower court. Walters settles with law enforcement to get his $2.4 million back and agrees not to sue.
2005 Walters offers the city of Las Vegas $7.2 million to lift the deed restriction on the land where the Royal Links Golf Club is located in order to build about 1,200 homes. Lifting the deed would increase the land value between $24 million and $28 million. The city approves the deal, then rescinds the vote because of an investigation.
2005 Then Attorney General George Chanos hires an independent third-party law firm to research Walters' land deal related to the proposed residential development on the Royal Links Golf Club. The report states Public Works Director Richard Goecke "seemed to place the interests of real estate developer Bill Walters above the interests of the City of Las Vegas and its constituents, in breach of the public purpose doctrine." A Metro police investigation found that "Goecke did commit acts which were likely criminal in nature." But the report said legal action was not possible because the statute of limitations had expired.
July 2010 Walters requests to revise a 99-year lease as the Bali Hai Golf Club, which is not making enough money to pay rent to McCarran International Airport, so it can be developed into a 2 million-square-foot commercial complex.
September 2011 The Clark County Commission agrees to allow Walters to develop 140 acres, which includes the Bali Hai Golf Club, pending approval from the Bureau of Land Management.
2014 The FBI investigates Walters, billionaire Carl Icahn, and professional golfer Phil Mickelson for trading of shares in Clorox in 2011.
2014 Desert Pines Golf Course is sold.
November 2015 Walters Group President Michael Luce submits a letter to the Las Vegas City Council asking for the deed restriction on 128 acres of the Bali Hai Golf to be removed, stating the company plans to seek Clark County's approval for the development of up to eight housing units per acre on the site.
