NEW YORK — Lawyers for a Las Vegas gambler linked to golfer Phil Mickelson are seeking a superhero’s help in getting the gambler’s insider trading conviction reversed, saying in court papers Friday a so-called “bat phone” the government said was used to communicate stock secrets was really used to secure prostitutes for the prosecution’s star witness.
The lawyers, Barry Berke and Paul Schoeman, filed papers in Manhattan federal court challenging last month’s conviction of William “Billy” Walters, who remains free on bail before sentencing, scheduled for July 14.
Prosecutors said Walters made more than $40 million illegally trading the stock of Dallas-based Dean Foods Co. after Walters gave former Dean Foods board chairman Thomas Davis a pre-paid throwaway phone so they could discuss inside information without it being traced.
During the trial, prosecutors, Davis and defense lawyers referred to the phone as the “bat phone.” That name comes from the phone and secure line Commissioner Jim Gordon had to contact Batman, seen often in the 1960s TV show.
Lawyers for Walters, though, say Davis didn’t get the phone until December 2012, weeks after the key trades are alleged to have occurred from May to October 2012.
Prosecutors, through a spokesman, declined to comment.
The defense lawyers also cited trial evidence, noting that Davis admitted in his testimony that he repeatedly called escort services and his wife had previously found a text message on his regular cellphone that suggested he was paying for sex.
The lawyers also suggested that Davis had used the throwaway phone to conceal sports gambling.
“Even though the government knew or should have known that Mr. Davis’ testimony about using the bat phone between May and October 2012 was false — because he could not have received it until after that period — the government nonetheless elicited Mr. Davis’ perjurious testimony on direct examination,” the lawyers said.
They said the government “embraced the false testimony, aggressively defended it, misleadingly bolstered it, and thereby obtained a conviction that should not stand.”
Mickelson never testified, though he had been on a list of prospective witnesses.
A prosecutor had said Mickelson earned nearly $1 million after Walters told him to buy Dean Foods stock in 2012. The prosecutor said Mickelson gave the profits to Walters to cover gambling debts. The Securities and Exchange Commission cited Mickelson for the trades in a lawsuit, and Mickelson agreed to repay the money. Mickelson was not charged.
During the trial, Berke used Mickelson as proof that Walters was innocent, saying that if Walters had inside information “the last thing you would do is give it to Phil Mickelson, one of the most famous athletes in the world, who is going to attract regulatory scrutiny.”
Walters, 70, has built a sprawling business of auto dealerships, car rental agencies and golf courses worth hundreds of millions of dollars.