Walters’ lawyers claim devious tactics

Bill Gang

Monday, Jan. 10, 2000 | 11:21 a.m.

Defense attorneys in the Billy Walters money-laundering case have accused the prosecutor of using "McCarthy-like, devious and backhanded tactics" in an attempt to keep District Judge Donald Mosley from presiding over the case.

The politically connected gambler and golf course entrepreneur and three others are facing their third indictments on charges of illegally transferring funds in and out of Nevada through a national and international sports betting operation.

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

When the third indictment was returned, Deputy Attorney General David Thompson told Chief District Judge Lee Gates that the allegations were substantially different than the first two cases.

Because of that, the chief judge randomly assigned the case to District Judge Michael Douglas.

But the defense argues the third case is based on the same facts as the first two and properly should have returned to Mosley's courtroom.

Defense documents filed Friday in District Court charge Thompson with trying to make "an end run around the (court's) no forum shopping policy," an attempt that defense attorneys say would violate constitutional guarantees of due process and fairness.

They also allege that Metro Police Intelligence Unit Detective Gayland Hammack promoted unfounded allegations that the judge acted improperly by meeting secretly with defense attorneys in the case behind closed doors.

"Apparently the state wants nothing more than to try and dirty a judge with self-serving, specious allegations, which the FBI after interviews with the judge and the district attorney, concluded had no merit," the defense alleged.

"These are precisely the methods of Joseph McCarthy," the court documents state.

The defense claims that Metro has a "vested financial interest in removing a judge who has not let the deputy attorney general run roughshod over the defendants' rights."

At stake, if Walters is convicted, is more than $3 million in purportedly illegal proceeds from Walter's gambling operation that could be subject to forfeiture.

A Thursday hearing is scheduled for Gates to decide which judge should preside over the case.

Thompson already has contended that Mosley is too closely associated with defense attorney John Moran Jr., who represents co-defendant James Jay Hanley, to be fair in the case.

The prosecutor 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 documents.

The defense response contended "the state's outrageous and purposely indirect attack on Judge Mosley appears intentionally designed to infuriate the judge to the extent that when the case is properly assigned to him, he will be so angry he will recuse himself because of those emotions."

"The deputy attorney general and his cohorts should not succeed in blatant forum avoidance by devious and backhanded tactics," stated the documents signed by Moran, Walter's attorney, Richard Wright, and Daniel Pray's lawyer, Jonell Thomas. The fourth defendant, New Yorker John Tognino, has not been arrested and has no lawyer.

In an affidavit, Moran claims that Hammack's report contains "not only falsehoods, half truths and inaccuracies, but also demonstrates a continuing pattern of prosecutorial abuses by the state."

Moran said that "the admitted unfounded surveillance by police agents of not only defense counsel in this matter, but also the District Court judge presiding on two prior indictments, as well as other private citizens in the community ... is a glaring abuse of police power at the hands of an unscrupulous prosecutor reminiscent of the recent Bill Bible witch hunt."

Moran said that while he is a friend of Mosley's -- as well as other judges -- his testimony in the judge's child custody case involved about eight questions "relative to the conduct of the minor child at a local restaurant."

He and the other defense attorneys have denied having improper discussions with Mosley about the case.

The third money laundering indictment, like the others, alleges the betting operation funneled money and information to and from illegal bookmakers across the country through Walters' 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.

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.

Walters has never disputed that he is a professional gambler but has always maintained there is nothing wrong with that.

But Thompson and a Clark County Grand Jury have disagreed that the way Walters conducts his business is legal.

The current indictment charges the defendants 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.