Door left open for a fourth indictment against Walters

Kim Smith

Monday, Oct. 2, 2000 | 10:47 a.m.

Money-laundering charges against golf course developer Billy Walters have been dropped for the third time, but a fourth indictment may not be out of the question.

In a written decision filed Friday, District Judge Mark Gibbons agreed with defense attorneys, saying the state attorney general's office acted improperly during the grand jury proceedings that resulted in Walters' indictment.

Gibbons dismissed the indictment based on those problems. However, he rejected the defense notion that there isn't enough evidence to obtain an indictment, thus leaving open the door for a fourth indictment.

This morning Deputy Attorney General David Thompson said a decision has not yet been made whether to appeal Gibbons' decision or to seek another indictment.

The decision, he said, will be Attorney General Frankie Sue Del Papa's. Grand jury proceedings are secret.

"The attorney general is aware of the decision, but we haven't had a conference on it yet," Thompson said.

Walters' defense attorney, Richard Wright, said he will be prepared whatever the decision.

"I would hope that at some point discretion would prevail in the attorney general's office, but I'm not optimistic," Wright said. "Normally, recognition sets in with prosecutors that a case is snake-bitten for a reason. There is no case here except where they've tried to create one."

Authorities believe Walters, James Hanley and Daniel Pray operated an illegal gambling ring out of Walters' sports consulting business, Sierra Sports Consultants.

Police believe that people working out of Sierra Sports began placing bets with bookmakers outside Nevada in December 1994. The crime of money laundering was committed, police allege, when the winnings were placed in safe deposit boxes in Nevada.

Sierra Sports was raided in December 1996, and three indictments have been handed down since then, with all three being dismissed because of irregularities during the grand jury proceedings.

The men's attorneys, Wright, John Moran Jr. and JoNell Thomas, went before Gibbons on Sept. 22 to again argue that there were fatal flaws in the attorney general's presentation of the case.

Wright told Gibbons that the attorney general's office made mistakes when explaining money-laundering laws to the grand jurors, and jurors were unfairly prejudiced by talk of organized crime.

There is no evidence that Walters and his co-defendants were involved with the mob, yet New York detective Edward Galanek spoke at length about organized crime and such crime families as the Gambinos, Wright complained.

Thompson said the jurors were told numerous times not to infer anything from Galanek's testimony. His testimony about organized crime, Thompson said, was meant to show his background, training and experience.

Gibbons wrote in his decision, "A prosecutor must act as the judge and gatekeeper in a grand jury proceeding to prevent inadmissible evidence from infecting grand jury proceedings. In this case, the state elicited the testimony and allowed the witness to ramble on about forbidden topics."

In arguing for the indictment to stand, Thompson told Gibbons that "voluminous" evidence exists against the men, including documentation that shows numerous transactions of $100,000 or more to people with code names.

Gibbons wrote that he believes the attorney general's office has the "slim or marginal" evidence needed to sustain an indictment if one accepts the attorney general's office's interpretation of the money laundering statutes.

Gibbons said that although he will make no ruling, he is inclined to accept the defense's interpretation of the statute. They believe that Walters and his co-defendants would have had to know that the proceeds they received were illegal.

Wright said he expects the issue to come up again if the attorney general's office continues its pursuit of Walters.