U.S. Seeks 10 Years for Gambler in Insider Trade Plot

  • Billy Walters traded on tips from Dean Foods ex-chairman Davis
  • Prosecutors scoff at health-related leniency, citing golf time

Billy Walters arrives at federal court in New York on April 6, 2017.

Photographer: Louis Lanzano/Bloomberg

Disgraced sports gambler Billy Walters should be jailed for as long as 10 years -- the maximum under U.S. guidelines -- for masterminding an insider-trading scheme with ex-golf pal and former Dean Foods Co. Chairman Tom Davis, prosecutors told a judge.

The government made its recommendation in a filing Friday in federal court in Manhattan, where the 71-year-old gambler was found guilty in April of making $43 million from Davis’s tips about Dean Foods. Defense attorneys earlier this month suggested a term of about a year. Sentencing is set for July 27.

Billy Walters

Photographer: Louis Lanzano/Bloomberg

A brief jail term "would send a message that wealthy defendants can simply buy their way out of the criminal justice system," Assistant U.S. Attorney Brooke E. Cucinella said in the filing.

The case -- among the most colorful and high-profile insider-trading prosecutions in recent years -- also entangled pro golfer Phil Mickelson, who 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 testified against Walters. He’s yet to be sentenced.

Prosecutors portrayed Walters in Friday’s filing as "unrepentant" about his role in a "brazen scheme." The government also mocked a bid by Walters for leniency on various health-related grounds, saying his health and age concerns are undermined by his 77 visits to a San Diego golf club since 2014, including three in the last two weeks.

"Since Walters’s age and health concerns are not so serious as to keep him off the links, they should not provide a basis to keep him out of jail," they said.

Walters’s attorney, Barry Berke, didn’t immediately respond to a call for comment.

Sports Gambler’s Insider Case Proves Good Bet for Prosecutors

The government rejected Berke’s attempt in a July 10 filing to seek a shorter term on the grounds that Davis, Walters’s former friend and business partner, was largely to blame for the scheme.

"Davis was undoubtedly an eager participant," Cucinella wrote. "But only Walters knew the extraordinary magnitude of his illicit trading activity, which at one point included a single position in Dean Foods stock worth over $100 million."

Walters’s July 10 sentencing recommendation highlighted the gambler’s meager beginnings in Kentucky, his hard work starting at an early age, his philanthropy in Las Vegas, and letters of support sent by friends and family members.

"The letters speak forcefully to the commitment, kindness, sympathy, altruism and generosity that Mr. Walters has shown to his communities, friends and employees, and even those he barely knew," his attorney wrote.

U.S. District Judge P. Kevin Castel earlier this month rejected a long-shot bid by Walters for a new trial, saying there was “overwhelming circumstantial evidence” of his guilt. The gambler claimed that Davis lied when he testified that he used a secret phone, named the “Bat Phone,” to give tips to Walters in 2011 and 2012.

The case is U.S. v. Davis, 16-cr-00338, U.S. District Court, Southern District of New York (Manhattan).

— With assistance by Patricia Hurtado

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