Gambler Catches Feds Red-Handed on Press Leaks


MANHATTAN (CN) — Confirming his longstanding hunch, a celebrity gambler charged with a $40-million insider-trading scheme forced an FBI agent who leaked confidential information to The New York Times and The Wall Street Journal to show his hand.

Weeks after a grand jury indicted Las Vegas high-roller William “Billy” Walters in May, leaked information from that grand jury session started appearing in New York’s most powerful newspapers.

On May 30, 2014, The Wall Street Journal revealed that the insider-trading probe began five years ago when investigators noticed unusual trades in Clorox.

DealBook, the financial blog of the New York Times, uncovered more of the inside story in June in a post titled “Dean Foods Receives a Subpoena in an Investigation Into Mickelson’s Trades,” in a scoop related to celebrity golfer Phil Mickelson.

Suspecting FBI actors behind the leaks, attorneys for Walters requested an order forcing the government to investigate the disclosures, which U.S. District Judge Kevin Castel granted on Nov. 17.

On Friday afternoon, the office of Manhattan U.S. Attorney Preet Bharara confirmed what could no longer be denied.

“Based upon the agent’s admissions, which the [U.S. Attorney’s Office] and the FBI regard with the utmost seriousness, it is now an incontrovertible fact that there were FBI leaks of confidential information to the press regarding this investigation,” his office wrote in a 5-page letter.

Prosecutors did not disclose the name of the FBI agent behind the leaks, except to rule out agent Matthew Thoreson, who had worked on the case and whose name previously appeared in court papers.

Leaks within the bureau caused “great distress and anger at all levels within the USAO (up to the United States Attorney) and the FBI (up to the Assistant Director in Charge of the New York Field Office),” according to the letter.

Both articles noted that pre-trial publicity could jeopardize an investigation, prosecutors said.

The U.S. Attorney’s office says it has referred the matter of the Office of Professional Responsibility and the Department of Justice’s inspector general.

“Those referrals are now pending, and following our initial interviews, the agent has declined to meet with us further without counsel,” the letter states.

In addition to the public document, prosecutors have filed a sealed submission for the judge’s eyes alone. They argue that this secret letter makes a fact-finding hearing unnecessary.

The U.S. Attorney’s office did not respond to telephone and email requests for comment.

Attorney Barry Berke, who represents Walters for the firm Kramer Levin, also did not respond to a voicemail request for comment.


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