NEW YORK — Bill Walters just lost the biggest bet of his life — and this time, it’s likely to cost him much more than cash.
Widely considered the nation’s most successful sports gambler, Walters was convicted Friday in the highest-profile — and most colorful — insider trading trial in years. Testimony featured golfer Phil Mickelson and billionaire investor Carl Icahn, as well as a seamy world of gambling debts, stock tips delivered on burner phones and charity money used for prostitutes.
The verdict was delivered as Mickelson started second-round play at the Masters Tournament in Augusta, Georgia.
Walters built a fortune with wagers on football and basketball and bragged that he never had a losing year. But he faced the longest of odds in taking on the Justice Department, which wins almost 95 percent of its cases.
Now — after a four-week trial — the 70-year-old Las Vegas gambler faces a lengthy prison term. The maximum sentence on the most serious charge is 20 years. The jury found him guilty of all 10 counts of fraud and conspiracy after about five hours of deliberations.
“I just lost the biggest bet of my life,” Walters said outside Manhattan federal court minutes after the jury returned its verdict.
“To say I was surprised would be the biggest understatement of my life,” Walters said. “Frankly, I’m in total shock.”
Unless he’s successful on appeal, Walters will be forced to walk away from Las Vegas businesses that include golf courses, auto dealerships and car-rental agencies, with total revenue of $500 million in 2013, according to testimony from his company’s controller. Walters, who didn’t testify at the trial, has said he owns seven homes and a $20 million jet.
The government convinced jurors that Walters traded on tips from Tom C. Davis, the former chairman of Dean Foods Co., who testified that he fed Walters inside information that helped the gambler make more than $43 million over six years.
Prosecutors described an old-fashioned insider trading scheme: Davis would tip Walters, Walters would trade on it, and Davis would either make a profit or avoid a loss. The prosecutors claimed Walters would make a call to Davis’s disposable phone — a so-called Bat Phone, which Davis claimed he eventually tossed into a creek behind his home — and then make trades in Dean Foods stock soon afterward.
In her closing argument to the jury, prosecutor Brooke Cucinella called Davis the gambler’s “man on the inside” and argued that Walters’ use of disposable phones was proof he was aware he was breaking the law.
Davis, Walters’s friend, business partner and golfing pal of more than 20 years, was the government’s star witness. He said he passed on information because Walters provided him with loans of almost $1 million that he needed to pay off gambling debts, cover failed investments and finance a bitter divorce. Davis, 68, pleaded guilty to a dozen separate crimes and agreed to cooperate with prosecutors in a bid for leniency when he’s sentenced.
Barry Berke, Walters’s lawyer, depicted Davis as a desperate man willing to do anything to avoid prison, including lying to get his former friend convicted. Berke grilled Davis on his gambling habits and propensity to spend time with prostitutes, including the misappropriation of $150,000 from a charity for a battered women’s shelter. Davis used the money to pay off a casino debt and for prostitutes, Berke said. And he went and partied in Sin City after making the deal with the government.
“Isn’t it true that on the day you signed your agreement with the government, you arranged to go on a gambling junket to Las Vegas?” Berke asked Davis.
Davis responded that the trip was a birthday present for himself and he traveled with his wife and friends.
“Counselor, I’d been under a lot of pressure, and had a good time,” Davis said.
Walters didn’t need inside information to profit on the stock market, his lawyers suggested with the witnesses they called to testify.
Walters’ brokers said the gambler was an astute investor who did assiduous research before placing a bet on a company — sometimes as much as $50 million in one shot. Alan Duncan, one of the brokers, said he considered Walters “the Babe Ruth of Risk.” Another, Rob Miller, said Walters got most of his trading ideas from Icahn.
Icahn wasn’t accused of any wrongdoing.
Walters has beaten the odds before. Born in Kentucky, the son of a professional gambler and a teenage mother, Walters began shooting pool — nine ball — at age 4, and by 10, he had progressed to gambling. Decades ago, he was acquitted of state gambling charges after a trial and won dismissal of state indictments accusing him of conspiracy and money laundering, according to court papers filed in a 2014 lawsuit in Las Vegas.
The trial offered jurors a glimpse of a rarefied world where corporate executives mixed with professional athletes on some of the country’s top golf courses. Walters was friends with Icahn and Mickelson, as well as Davis.
Prosecutors said Walters shared one “sure winner” tip he got from Davis with Mickelson, allowing the golfer to make about $931,000 when Dean Foods announced a lucrative spinoff of a unit that caused the stock price to surge. Mickelson used the money to repay a gambling debt to Walters, transferring $1.95 million, according to records shown to jurors.
Mickelson wasn’t charged with wrongdoing, although he agreed to repay the profit he made. He also wasn’t called as a witness after making it clear to lawyers that he would invoke his Fifth Amendment right against self-incrimination, Berke told the judge.
The Associated Press contributed to this report.