Battle brews over Walters-case judge

Bill Gang

Wednesday, Dec. 29, 1999 | 10:54 a.m.

The legal wrangling over which judge will preside in the money laundering case against politically connected gambler and golf course entrepreneur Billy Walters has taken something of a personal twist.

Defense attorneys for Walters and three others indicted with him in November allege that Deputy Attorney General David Thompson misled the court system to get the case moved out of District Judge Donald Mosley's court.

Mosley had been the judge assigned to the first two indictments against the defendants, and he dismissed both on technical challenges.

Thompson, in court documents filed Monday, alleged that Mosley should be excluded as the judge in the case because of his close personal relationship with prominent attorney John Moran Jr., who represents a secondary defendant in the case.

Thompson noted that Moran and his wife had testified on Mosley's behalf in the judge's child custody case in 1994.

"The situation gives the appearance of possible impropriety because of the closeness of the relationship, the possibility of an exchange of favors in the current judicial proceedings and because the judge chose not to reveal the existence of the relationship," Thompson wrote in court briefs.

Walters' attorney Richard Wright has alleged in court documents that Thompson is improperly engaging in "forum shopping, or more accurately, forum avoidance," to prevent Mosley from having a chance to boot the case again.

Wright suggested that Thompson's statement in court that the third indictment was entirely different from the first two was false or misleading and that the statement could amount to contempt of court.

Thompson said today that he did nothing more than seek to have the case randomly assigned to one of the district judges in Clark County. Through that system there was a chance Mosley would again have drawn the case.

"The only ones interested in having the case assigned to a particular judge are the defendants," Thompson said.

Chief District Judge Lee Gates is scheduled to decide the issue at a Jan. 13 hearing.

The case currently is assigned to District Judge Michael Douglas, although his cases are being transferred to District Judge Kathy Hardcastle after the first of the year because Douglas will move to civil cases.

The third money-laundering indictment, like the others, alleges that Walters' betting operation funneled money and information to and from illegal bookmakers across the country through his Sierra Sports Inc. using a bank of computers and telephone lines.

There are no allegations that Walters and his associates ever acted as bookmakers and took bets on sporting events, but Thompson has said that even placing bets with illegal bookies and transferring the cash across state lines is a crime.

In addition to Walters, the defendants are Jimmy Jay Hanley, New Yorker John Tognino and computer expert Daniel Pray.

The re-indictment was designed to address some of the legal problems of the past indictments, although whether that was successful will be determined during what is expected to be an extensive legal battle.

Several years ago Walters and others stood trial in federal court as part of the so-called "Computer Gang" that conducted a national sports betting operation.

They were acquitted.

The first state court indictment was dismissed by Mosley in a hearing that was closed to the public, although the Nevada Supreme Court later ruled he had no authority to toss out the charges.

The second indictment also was dismissed by Mosley because of defense claims that no crime was alleged under Nevada law. Thompson appealed that action and the case is still pending in the high court. The third indictment may make that matter moot.

Mosley had ruled that money-laundering laws didn't apply because the proceeds of Walters' betting operation were held in casino safety deposit boxes rather than banks.

Walters has never disputed that he is a professional gambler but has always denied wrongdoing.

The current indictment charges Walters, Hanley, Tognino and Pray with conspiracy and five counts each of unlawful transactions involving monetary instruments -- generally referred to as money laundering -- and unlawful transportation of monetary instruments. The conspiracy count can be a misdemeanor or gross misdemeanor, but the other charges are felonies.