Patricia Hurtado Bloomberg, Review Journal
NEW YORK — Bill Walters just lost the biggest bet of his life — and this time, it’s likely to cost him much more than cash.
Widely considered the nation’s most successful sports gambler, Walters was convicted Friday in the highest-profile — and most colorful — insider trading trial in years. Testimony featured golfer Phil Mickelson and billionaire investor Carl Icahn, as well as a seamy world of gambling debts, stock tips delivered on burner phones and charity money used for prostitutes.
The verdict was delivered as Mickelson started second-round play at the Masters Tournament in Augusta, Georgia.
Walters built a fortune with wagers on football and basketball and bragged that he never had a losing year. But he faced the longest of odds in taking on the Justice Department, which wins almost 95 percent of its cases.
Now — after a four-week trial — the 70-year-old Las Vegas gambler faces a lengthy prison term. The maximum sentence on the most serious charge is 20 years. The jury found him guilty of all 10 counts of fraud and conspiracy after about five hours of deliberations.
“I just lost the biggest bet of my life,” Walters said outside Manhattan federal court minutes after the jury returned its verdict.
“To say I was surprised would be the biggest understatement of my life,” Walters said. “Frankly, I’m in total shock.”
Unless he’s successful on appeal, Walters will be forced to walk away from Las Vegas businesses that include golf courses, auto dealerships and car-rental agencies, with total revenue of $500 million in 2013, according to testimony from his company’s controller. Walters, who didn’t testify at the trial, has said he owns seven homes and a $20 million jet.
The government convinced jurors that Walters traded on tips from Tom C. Davis, the former chairman of Dean Foods Co., who testified that he fed Walters inside information that helped the gambler make more than $43 million over six years.
Prosecutors described an old-fashioned insider trading scheme: Davis would tip Walters, Walters would trade on it, and Davis would either make a profit or avoid a loss. The prosecutors claimed Walters would make a call to Davis’s disposable phone — a so-called Bat Phone, which Davis claimed he eventually tossed into a creek behind his home — and then make trades in Dean Foods stock soon afterward.
In her closing argument to the jury, prosecutor Brooke Cucinella called Davis the gambler’s “man on the inside” and argued that Walters’ use of disposable phones was proof he was aware he was breaking the law.
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