The law has pursued sports bettor Billy Walters for more than 25 years. Is the gambler’s uncanny luck about to run out?
IN HIS DARK SLACKS and a red golf shirt, Billy Walters looked like he might have just finished a round at his flashy Bali Hai course on the south Strip. But he wasn’t strolling toward the clubhouse on May 19. He was seated, under arrest, amid a row of less impeccably dressed defendants, all waiting their turn to hear their charges read in U.S. Magistrate Judge George Foley Jr.’s packed courtroom. The confidence and color drained from his face, his white hair disheveled, Walters appeared to have taken a punch in the stomach. It was a pain in the gut he’d felt before.
Walters appeared almost lost as his friend and longtime defense attorney Richard Wright stood nearby. Walters couldn’t be blamed for feeling a sense of déjà vu, as he had faced plenty of previous charges in his life. But those had all stemmed from his uncanny success as a professional sports bettor, and he had beaten every one of them while gleefully embarrassing his enemies in the process.
This time, it’s different. Walters is accused of cheating in America’s biggest league of gambling — Wall Street. In a case brought by Preet Bharara, the U.S. attorney for the Southern District of New York, Walters is charged with insider trading violations in connection with the alleged manipulation of stock in Dallas-based Dean Foods. Also charged is Dean Foods board member Thomas C. Davis, who pleaded guilty to 12 felonies and has agreed to cooperate with federal authorities.
Charges against Walters include securities fraud, conspiracy to commit wire fraud, and wire fraud. He faces the prospect of millions in forfeiture and seized assets, and has also been hit with civil sanctions by the Securities and Exchange Commission. In June, Walters pleaded not guilty to the 10 felony counts against him. Golfer Phil Mickelson, a high-profile inside player in the alleged scheme, escaped indictment in the criminal case, but was fined more than $1 million by the SEC based on ill-gotten profits he made trading on stock after receiving insider tips from Walters. One of the world’s greatest golfers, Mickelson became heavily indebted to Walters in the scheme, according to authorities.
Wright, who walked into the Lloyd D. George U.S. Courthouse that spring 2016 afternoon with a $100,000 check to free Walters from custody, listened as Magistrate Foley explained the process. In a matter of legal formality, Walters gained an expedited release from custody and left the courthouse through a side gate — away from public scrutiny — within a few hours.
“Those who know me best know that it is preposterous to think that I would involve myself in insider trading,” Walters told the press the previous year when the criminal allegations first surfaced. But those who have followed his career know he has made millions of dollars with incredibly accurate information while rising in stature as an uncommonly prescient political insider. Local professional gamblers speak with affection and admiration about Walters’ relentless pursuit of the “best of it” — that is, the smart bettor’s inside edge that comes from information, insight and experience. But when it comes to Wall Street, an inside edge can come dangerously close to insider trading.
Local and federal law enforcement agents were also in court that day. Some were merely curious, while others had been examining Walters’ proximity to lucrative business deals with local government officials. Some had participated in his arrest at the fusion-fare Cili restaurant he owns at Bail Hai, known for its power lunches and “discreet wait staff.” In their world, Walters’ uncanny success in gambling and business was similar to the story arc of now-fallen powerhouse lobbyist Harvey Whittemore, who was convicted in 2014 on federal campaign contribution violations, but was suspected of facilitating much deeper corruption.