Gambler says FBI leaks warrant insider trading case’s dismissal

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By Nate Raymond | NEW YORK

NEW YORK A famed Las Vegas sports bettor on
Friday urged a federal judge to dismiss insider trading charges
against him after an FBI agent admitted to leaking information
to reporters about the investigation.

In a motion filed on Friday in Manhattan federal court,
lawyers for gambler William “Billy” Walters contended the
agent’s leaks were part in illegal campaign to use secret grand
jury information to revive a moribund investigation.

“Strategically leaking grand jury information that is by law
required to be kept secret is the antithesis of how our
government is allowed to investigate and try to build cases
against its citizens,” they wrote. “And yet that is exactly what
happened here.”

Walters’ lawyers said the FBI used the leaks to obtain leads
and revive a case that otherwise would not have been filed. The
case could not have been the first time in which FBI agent David
Chaves and his squad leaked information, the lawyers said.

Representatives for the FBI and Manhattan U.S. Attorney
Preet Bharara’s office, which is prosecuting the case, declined
to comment. A lawyer for Chaves did not respond to a request for

The motion came after prosecutors in December revealed that
Chaves had admitted to being a “significant source” of
information about the investigation in 2013 and 2014 for
reporters at The Wall Street Journal and The New York Times.

Those newspapers published a series of reports beginning in
2014 about the investigation, two years before prosecutors in
May brought insider trading charges against Walters, who has
built a fortune as a sports bettor.

The leaks are now the subject of a criminal investigation by
the Justice Department’s Office of the Inspector General,
prosecutors disclosed Dec. 21.

Chaves, an FBI coordinating supervisory special agent,
oversaw the squad that conducted the investigation after being
involved in numerous high-profile white collar cases.

Prosecutors said Walters made more than $40 million through
insider trading on tips supplied by Thomas Davis, the Dean Foods
Co’s former chairman.

In a related civil case, the U.S. Securities and Exchange
Commission said Phil Mickelson, who has won three Masters pro
golf titles, at one point bought shares in Dean Foods on a
recommendation by Walters.

Mickelson was not accused of wrongdoing, but he reached an
agreement to pay back $1.03 million the SEC said he earned
trading Dean Foods shares. Davis has pleaded guilty. Walters is
scheduled to face trial on March 13.

The case is U.S. v. Davis et al, U.S. District Court,
Southern District of New York, No. 16-cr-338.

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