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Billy Walters is suing former DOJ and FBI officers for unlawful leaks and cover-ups in insider buying and selling

The complaint alleges that former US attorney Preet Bharara, two top FBI agents, are implicated in wrongdoing. Lawsuit alleges businessman, famous bettor denied due process.

In a previous lawsuit filed in the U.S. District Court by Greenberg Glusker Fields Claman & Machtinger LLP on behalf of Billy Walters, five senior federal law enforcement officers – including Preet Bharara, the former U.S. attorney for the southern borough of New York – are accused, covered up, and lied to federal court about illegally disclosing false information to the media, a practice that has increasingly plagued the Justice Department and the FBI in recent years.

The lawsuit alleges that Bharara and other Justice Department officials “made no effort to investigate, eradicate, or otherwise repair the leaks” in order to revive a stalled criminal investigation into prominent businessman and philanthropist William “Billy”. Walters. You can find the lawsuit here.

After falsely denying in court records that a government official was behind the leaks, the Justice Department made a U-turn on the eve of an evidence hearing requested by Walters. Bharara then admitted, for the first time in a letter to the court, that it “is now an indisputable fact” that the FBI released information about the case to the media.

“Bharara and the Justice Department’s failure to intervene for more than two years after learning of the leaks is reprehensible,” said Pierce O’Donnell, partner at Greenberg Glusker Fields Claman & Machtinger LLP law firm in Los Angeles. “Worse, the prosecutors pretended not to know about this outrageous and unethical behavior until Mr. Walters and his attorneys convinced a judge to get them to tell the truth.”

The complaint highlights the epidemic of illegal leakage by the DOJ and FBI – particularly in the southern borough of New York – which is increasingly being used against business leaders, celebrities and public officials. It says there: “While [James] During Comey’s tenure as FBI director, leaks became a preferred (and illegitimate) weapon of federal law enforcement in their self-proclaimed “war on economic crime.” In this culture of leaks, no citizen was safe. “

The FBI attempted to “tickle the wire” by illegally disclosing information to journalists in the hopes that news would cause Walters, according to the complaint, to incriminate himself on faulty electronic devices. Bharara and the other defendants “then waged a pervasive campaign and cover-up to rob [Walters] its constitutional right to a procedural, fair and impartial investigation, a grand jury trial and a criminal trial, ”the lawsuit said.

Senior federal law enforcement officers – including Admitted Spills Comey and Deputy Andrew McCabe – have ignored this cancer in their midst. The complaint goes on to say: “[A] The vast majority of DOJ staff accused of professional misconduct – including federal prosecutors – continue to retire, step down, or move to another position before discipline … The fox is guarding the chicken coop. “

The complaint is intended to establish claims for damages and punitive damages and to issue a judicial declaration that the federal authorities have violated Walters’ constitutional rights to due process.

The defendants named in the lawsuit are:

  • Preetinder Bharara, the former U.S. attorney for the Southern District of New York, who was fired by President Trump in 2017. The lawsuit said the Bharara Southern District “has long been a hotbed of official corruption, with widespread use of leaks and negatives, advertising to secure convictions and promote the careers of DOJ prosecutors. In connection with the Walters case, the Wall Street Journal reported “a pattern of unsettling behavior and problematic culture in Mr. Bharara’s old shop.”
  • David Chaves, the former regulatory specialty agent who oversaw all white-collar crime investigations in the FBI’s New York field office. The complaint reads: “This travesty is compounded by the fact that Chaves – the FBI overseeing agent and licensed tidbit – was never prosecuted or disciplined. On the contrary, Chaves was promoted and allowed to retire with full benefit. “Chaves now markets himself as a paid speaker on securities fraud.
  • Daniel Goldman, Former U.S. Assistant Attorney. According to the complaint, Goldman filed briefs knowingly containing false and misleading statements in order to promote the cover-up of USAO as one of the chief attorneys in the Walters trial. Goldman later served as an attorney on the House Judiciary Committee on President Donald Trump’s impeachment investigation.
  • Richard Zabel, U.S. assistant attorney for the Southern District of New York, who reported directly to Bharara.
  • Telemachus Kasulis, US assistant attorney for the South District of New York, directed ongoing operations for the Walters investigation.
  • George Venizelos, assistant director in charge of the FBI’s New York branch, overseeing Chaves.

Two federal courts previously agreed that the Justice Department was likely to have broken the law and lied about the investigation into Walters.

Image courtesy of https://commons.wikimedia.org/wiki/File:Usdepartmentofjustice.jpg

“The arresting characteristic of this case is that the FBI investigation officer was the officer [Chaves] was also involved in the illegal disclosure of confidential information; and the leakage of grand jury statements is in some ways more egregious than anything Walters did … “Dennis Jacobs, Senior US Circuit Judge, wrote in a 2018 statement.” The FBI relies on the trust of the public, the jury and instructed the judge. This trust is critical to his mission; It’s very bad for business. “

Bharara herself admitted during a paid lecture in 2017 at the Law School of the University of Nevada in Las Vegas that Chaves had behaved illegally. “Well, a certain agent who did something terrible and will and should face the consequences. He should absolutely do it, ”said Bharara. At the event, Bharara also claimed that his office had alerted the court to the leaks, but failed to notice that it publicly denied any wrongdoing for two years.

So far, Walters only knows one person – himself – who has been punished in his case. With this lawsuit, Walters is demanding one thing: long overdue justice.

The lawsuit also highlights the unusual circumstances under which Walters was arrested in 2016. After FBI agents took Walters into custody in his Las Vegas office, they drove him 15 miles to the JW Marriott Las Vegas Resort & Spa. He was placed overnight in a one-bedroom suite with five federal agents who ordered room service for him at the taxpayer’s expense. Agents told Walters that Bharara did not want the local media to know about the arrest because he planned a press conference in New York the next morning to trumpet the charges.

On May 31, 2014 The New York Times published a cover story titled “Authorities Find Insider Trading Cases Tied to Phil Mickelson Are Slow To Take Shape.” It was reported that the FBI, SEC and the Manhattan federal attorney’s office found Wall Street investor Carl Icahn, investigated professional golfers Mickelson and Walters for possible insider trading in Clorox stock. Based solely on anonymous sources, the article found that the Clorox investigation dragged on for more than two years “without providing definitive evidence of insider trading.”

Similar articles, loaded with confidential information from a secret grand jury investigation, appeared in The Times and The Wall Street Journal the next week. Chaves later admitted that despite the many legal and ethical prohibitions against such leaks, he was the main source of information. For all the fanfare and front page coverage, the stories contained false information. The Times later published corrections to four articles in which it admitted that it had “overstated” the scope of the investigation. A Justice Department official later said the FBI agent was angry with the corrections and threatened that the New York Times was “on the radar”.

Although Bharara and his subordinates knew that an FBI agent was the tidbit before a single message was released, they made no effort to investigate or fix the leaks, the lawsuit said. When Walters raised the issue of the leaks, Bharara’s office called it a “fishing expedition,” although evidence shows they were fully aware of the wrongdoing, according to the complaint.

Chaves hid in sight and planted secret investigative information in 13 newspaper articles between May 2014 and August 2015. When Chaves was finally interviewed more than two years after the first article, he immediately admitted, hired a defense attorney, and exercised his 5th right of amendment not to incriminate himself and to retire early.

Walters was convicted of insider trading in 2017, fined $ 10 million and sentenced to five years in prison. He was released earlier this year on Covid-19 after completing more than half his sentence. Mickelson returned more than $ 1 million in stock trading profits to settle a lawsuit and was not prosecuted. Icahn was not charged either.

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