Legendary Las Vegas sports gambler Billy Walters was indicted by the government in Ny Thursday for an alleged insider trading scheme that involved golfer Phil Mickelson.

Walters, 69, is accused of obtaining nonpublic information from Thomas Davis, the previous chairman of Dean Foods Co., that benefited Walters to the tune of $110 million. Walters allegedly bought and sold stock of the corporate with the insider information.

Dean Foods is a Fortune 500 company that's the largest processor and distributor of clean milk within the United States, in line with the government.

On Monday, Davis pleaded guilty to conspiracy, securities fraud, wire fraud, obstruction of justice and perjury. The SEC has also filed civil charges against Davis and Walters. Davis stepped down from his position as chairman of Dean Foods in August amid the government’s investigation.

U.S. Attorney Preet Bharara, the prosector behind online poker’s Black Friday in 2011, said in an announcement: “Tom Davis has admitted that, over five years as a Dean Foods board member, he repeatedly and systematically fed material nonpublic details about the corporate to Billy Walters, who we allege benefited handsomely by trading on that information.

"With an instantaneous channel into Dean Foods’ boardroom, Walters allegedly traded earlier than excellent news and bad news alike. As alleged, it was all excellent news for Walters, because he had the ideas before everyone else—he had tomorrow’s headlines today. Brazen insider trading remains to be a blot on our securities markets, and so the integrity of our markets remains to be a concern for this office.

When the board member of a Fortune 500 company feeds inside information to a pro gambler who makes a fortune on well-timed trades in that company’s stock, that may be a type of corruption."

Mickelson, who allegedly received a tip from Walters that ended in him receiving $900,000 in ill-gotten gains, wasn’t charged criminally, but he'll must give $1 million to the federal government in a settlement, consistent with a report from ESPN.

A lawyer for Mickelson told The brand new York Times that the golfer, some of the highest paid athletes in America, was just “an innocent bystander.” The report said that it’s unclear if Mickelson knew the origins of the trading tip from Walters. Mickelson owed Walters from a gambling debt.

In exchange for the insider information, Walters allegedly provided Davis with “substantial pecuniary benefits,” including capital for joint business ventures and two loans of nearly $1 million, the federal government said. The 2 men were good friends.

According to the Las Vegas Review-Journal, FBI agents and the IRS criminal investigation agents arrested Walters Wednesday afternoon at his Bali Hai golf club at the Strip south of Mandalay Bay. Walters owns several businesses in Las Vegas.

The report added that Walters’ lawyer said the costs were “based on erroneous assumptions, speculative theories and false finger-pointing.”

“Bill Walters is a real American success story, whose extraordinary accomplishments as a lawful sports gambler has been well known and lauded,” the lawyer, Barry Berke, said in a press release. “Mr. Walters and his counsel sit up for his day in court."

Federal and state investigations into Walters’ business dealings aren’t anything new. In 2002, a money laundering case against him was unsuccessful, in keeping with ESPN. In 1992, he was acquitted of illegal gambling charges in Nevada.

Read More... [Source: CardPlayer Poker News]