Rovell: Billy Walters Files Lawsuit Alleging Federal Agents Leaked Stories to the Media

Famed sports bettor Billy Walters, who was convicted of insider trading back in 2017, contends that the federal government illegally leaked information to the media.

Walters says that FBI agents leaked stories about him, and purposefully inflated the scope of the investigation, to push him to reveal more over a wiretap, Walters' lawsuit filed Thursday in New York alleges.

He's seeking a declaratory judgment confirming that his fifth amendment rights were violated by the defendants, including David Chaves, an agent in the New York FBI field office, and Preet Bharara, who served as US District Attorney for the Southern District of New York for eight years.

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Walters also wants a trial to discover compensatory damages for how his image was destroyed, as well as the recouping of associated attorney fees.

In 2017, Walters was found guilty of an insider trading scheme, netting more than $43 million on tips concerning the status of milk maker Dean Foods. Walters frequently golfed with Dean Foods CEO Tom Davis, who pleaded guilty and cooperated with the investigation. The longtime Las Vegas resident received a five-year prison sentence and a $10 million fine.

The story was well covered by the New York Times and the Wall Street Journal, the beneficiaries of the leaks, thanks to inclusion of Walters' friend, pro golfer Phil Mickelson, who the government alleged made $931,000 on a tip from Walters to buy Dean Foods stock.

Mickelson then allegedly used that to pay Walters back for a gambing debt. In 2016, Mickelson paid the $931,000 back to the Securities & Exchange Commission, plus $105,000 interest.

Mickelson's name was mentioned at Walters' trial more than 100 times, but Mickelson pleaded the fifth and never testified.

Walters has been a legendary name in betting lore. He moved from Kentucky to Las Vegas in 1980 after being convicted on bookmaking charges.

He did almost no media for more than 30 years, until he agreed to do an extensive piece with "60 Minutes" in January 2011.

On the show, Walters said he had never had a losing year in 30 years of sports betting. Correspondent Lara Croft talked of his $20 million jet and his seven homes.

In 2014, Walters sold one of those homes for $13 million and another — his 10,000 square foot mansion near San Diego went on the market for $26.9 million last month. Walters has been living there since late April when he was released from a Florida prison due to Covid-19.

While Walter went to jail, and has to serve until Jan. 2022, Chaves, the lawsuit said, retired in 2017 without any consequences for his alleged actions.