FBI Leak Judge Demands Progress Update on U.S. Probe of AgentBy and
Agent allegedly leaked probe of Billy Walters, Phil Mickelson
DOJ report provides ‘no meaningful information,’ judge says
A federal judge demanded that the Justice Department provide meaningful information about its probe of an FBI agent who is under scrutiny for leaking tips about an insider-trading investigation.
U.S. District Judge P. Kevin Castel, who oversaw the conviction of Las Vegas gambler Billy Walters, ordered the department’s Public Integrity Section in March to give him confidential quarterly reports on its investigation into leaks of grand jury material by Special Agent David Chaves. Castel said a report by the section’s acting chief provides "virtually no substance" and ordered another report within two weeks.
“What the court learns is that the section and the Inspector General are ‘continuing to investigate this matter,’ that they have obtained records and conducted multiple interviews and their ‘review of these materials is ongoing,’" Castel said in a court filing. “That’s it."
The Justice Department didn’t immediately respond to an email seeking comment.
Walters was convicted in April on charges of making $43 million from an insider scheme that also entangled pro golfer Phil Mickelson and Dean Foods Co. former chairman Tom C. Davis. Mickelson wasn’t accused of wrongdoing, but agreed to pay back almost $1 million he earned trading on information he got from Walters. Davis pleaded guilty and agreed to cooperate with the U.S. against Walters.
Walters was found guilty of 10 counts of fraud and conspiracy after a trial that featured testimony about Mickelson and billionaire investor Carl Icahn, gambling debts, stock tips delivered on burner phones and charity money used for prostitutes. He faces as much as 20 years in prison on the most serious charges when he’s sentenced July 27.
Lawyers for Walters unsuccessfully sought dismissal of the case before trial, claiming Chaves leaked details of his stock trading to a newspaper to breathe life into a failing investigation. Walters argued the leaks were designed to prod targets to incriminate themselves after a wiretap on Walters’s phone failed to turn up evidence.
Sean P. Casey, Chaves’s lawyer, didn’t immediately return voicemail and email messages seeking comment on the judge’s order. Chaves is facing possible criminal prosecution and a contempt-of-court finding by the judge.
The case is U.S. v. Davis, 16-cr-00338, U.S. District Court, Southern District of New York (Manhattan).