Arguably the most successful sports bettor in United States history was arrested and later released on $1 million bond in Las Vegas, as it was announced on May 19 that Billy Walters was charged with making over $40 million in stock deals due to insider trading.
Walters was featured in a 60 Minutes episode back in 2011, detailing his extensive background as a professional gambler, with him gaining prominence as the most famous member of the Computer Group in the early 1980s.
Walters has avoided jail time for decades despite being charged multiple times during his professional gambling career. In 1982, he pleaded guilty to misdemeanor bookmaking charges in his home state of Kentucky and was sentenced to six months of probation and ordered to pay a $1,000 fine. Since moving to Vegas, he has been targeted on numerous occasions but dodged any serious penalties.
Walters was charged with conspiracy and illegal transmission of wagering information and later acquitted in 1992. In addition, he was indicted for money laundering and saw that dismissed by a local judge as well in 2002. The most recent charges by the FBI and SEC are more severe and also involve former Dean Foods chairman Thomas Davis and pro golfer Phil Mickelson.
Davis reportedly tipped off Walters to a corporate spin-off of his company that resulted in a major market move. Walters was owed gambling debts by Mickelson and encouraged him to trade the company’s stock based on the inside info. Mickelson turned a profit of $931,000 but was not criminally charged in the investigation after agreeing to pay back $1.03 million to cover that amount plus interest.
Davis had resigned from Dean Foods’ board last August and has pleaded guilty to securities fraud. In his guilty plea, he admitted to throwing his cell phone into a Dallas creek after FBI agents visited him to discuss his role in the insider-trading scheme. The prepaid cell phone had been given to Davis by Walters to use specifically to provide info about Dean Foods.
In May of 2015, Davis had told the SEC in a deposition that he did not give Walters any non-public info. According to prosecutors, Walters made profits of $32 million between 2008 and 2014 and avoided losses of $11 million thanks to the info Davis provided to him.
Walters himself bought $52.7 million in Dean Foods stock in 2012 and urged Mickelson to invest $2.4 million before advising him to sell it off about a week later following the announcement of a WhiteWave Foods spin-off.
The money made by Mickelson was to be used to pay back Walters, who took bets from him. Mickelson has also been tied to a federal money laundering case in which a California man named Gregory Silveira transferred approximately $2.75 million as part of an illegal gambling operation.
Silveira pleaded guilty in June of 2015 to three counts of money laundering funds from an unnamed gambling client, presumably Mickelson, who has not been charged and is not under federal investigation for that crime.