Las Vegas sports gambler's jet use restricted in Dean Foods insider trading case
A wealthy Las Vegas gambler pleaded not guilty on Wednesday to charges that he engaged in an insider trading scheme that generated more than $40 million and included a tip that benefited star golfer Phil Mickelson.
Bond was set at $25 million for William "Billy" Walters, 69, who was charged with securities and wire fraud, as prosecutors argued in court to restrict his access to a private jet out of concern he could flee the country.
"This is a person who believes he's above the law," Assistant U.S. Attorney Brooke Cucinella said in court.
Walters' lawyer, Barry Berke, countered that Walters had no reason to flee and was anxious to fight the charges in court. He said Walters needed access to a private airplane to manage businesses, including auto dealerships and real estate firms nationally.
At an initial hearing on Wednesday, U.S. Magistrate Judge Andrew Peck rejected the prosecution's arguments by setting the $25 million bond and allowing Walters to continue using the airplane in the United States, provided the pilots signed onto part of the bond.
But prosecutors appealed Pack's decision to a higher-level judge, U.S. District Judge Kevin Castel, who at another hearing placed restrictions on the jet's use by giving court personnel who oversee defendants before trial the ability to require Walters use commercial flights.
Castel also restricted Walters' travel to parts of New York and California, where he has a home, and said Walters, who has a net worth of $200 million, would need to seek authorization for any travel to his businesses in five other states.
Walters was arrested nearly two weeks ago in Las Vegas on charges that he traded on insider tips supplied by Thomas Davis, the ex-chairman of Dean Foods Co, who has pleaded guilty and is cooperating with authorities.
Prosecutors said from 2008 to 2014, Walters made $43 million in profits and avoided losses trading on inside information about Dean Foods from Davis, and another $1 million trading on a tip about Darden Restaurants Inc.
In a related lawsuit, the U.S. Securities and Exchange Commission said Mickelson, who has won three Masters golf titles, also at one point bought Dean Foods' stock on a recommendation by Walters, to whom he owed money after placing bets with him.
Mickelson was not accused of wrongdoing but reached an agreement with the SEC to pay back $1.03 million the regulator said he earned trading the dairy company's stock.
The case is U.S. v. Davis et al, U.S. District Court, Southern District of New York, No. 16-cr-338.
