Another charge against Walters dropped

Friday, Dec. 7, 2001 | 10:19 a.m.

CARSON CITY -- An attorney for Billy Walters says he hopes the state attorney general's office will now end its "foolhardy" five-year quest to indict the Las Vegas businessman and gambler on bookmaking and illegal wagering charges.

The Nevada Supreme Court Thursday dismissed the third indictment against Walters and two of his associates, who were accused of being involved in a multimillion-dollar illegal sports betting operation and unlawfully transferring gambling proceeds throughout the country and overseas.

Defense lawyer Richard Wright said it was five years ago today the case started when authorities seized about $3 million in cash from lockboxes that belonged to Walters. And the money is still being held, he said.

Although there are two other prior indictments still lingering, Wright said, "I presume this will be the end of it."

Wright said the attorney general's office was like a "dog going after a bone" and he added the two other indictments have legal defects.

Deputy Attorney General David Thompson could not be reached for immediate comment on whether he will continue to pursue the case.

In the past, Thompson has defended the actions of his office and has said he would show that the evidence against Walters, a professional gambler and local golf course developer who has donated heavily to political campaigns, was strong.

"Everyone who is connected with a prosecution always does his best to properly handle proceedings and guarantee fairness," Thompson told the Sun in a June 9, 2000, story. "The real question is: Was there sufficient legal evidence for the grand jury to find probable cause to hold Mr. Walters and the others over for trial?" Thompson said there was.

In a September 2000 hearing before District Judge Mark Gibbons, Thompson said the evidence against Walters and the others was "voluminous." He outlined a number of alleged improper transactions, saying they numbered 128.

"You don't have to make a big leap of imagination to know that something was wrong," Thompson told Gibbons, who a week later ruled in favor of Walters.

The high court, in a unanimous three-page decision, upheld that ruling by Gibbons, who found there was only "slight or marginal" probable cause to support the indictment, against Walters and his two associates.

The evidence before the grand jury showed only that Walters' business had considerable contact with an alleged bookmaker in New York, and that the business frequently transferred large sums of money in casino accounts.

"While such circumstantial evidence allows an inference of money laundering in connection with illegal gambling, the state's evidence against respondents is marginal," said the court.

Attorney General Frankie Sue Del Papa has waged a campaign against Walters, who has been indicted three times. Also indicted in the present case were Daniel Pray and James Hanley who were associates of Walters.

The third money laundering indictment, like the other two, alleged the betting operation funneled money and information to and from illegal bookmakers across the country through Sierra Sports Inc. using a bank of computers and telephone lines.

There were no allegations that Walters, Daniel H. Pray and James J. Hanley ever acted as bookmakers and took bets on sporting events.

In oral arguments before the Supreme Court earlier this year, Thompson said Judge Gibbons made seven legal errors in dismissing the grand jury indictments and said they should be reinstated.

But the Supreme Court disagreed. It said questions by grand jurors during the closed hearings indicated they thought the three men were charged with bookmaking as part of an organized crime conspiracy. Thompson had admonished the grand jurors several times that the three were accused only of money laundering.

The court said, however, that Thompson did nothing to curtail "the flood of immaterial testimony concerning organized crime families."

The state, as one of its expert witnesses, called in New York Detective Edward Galanek, who specialized in illegal bookmaking. Galanek testified about thousands of documents that showed code names and money amounts owed. And he expanded on organized crime figures in New York, indicating Walters was tied to them.

The Supreme Court said the large amount of inadmissible evidence confused some of the grand jurors. It said attorneys for Walters "established a reasonable probability that the grand jury would not have indicted absent the inadmissible evidence."

Thompson had argued that the grand jury would have returned the indictment even without the irrelevant testimony.

The first grand jury indictment of Walters was dismissed by a district judge but reinstated by the Supreme Court. That indictment is pending in the District Court in Las Vegas. But Wright said it has some of the same deficiencies as the other two and he's "cautiously optimistic" the attorney general's office will let the case die.

The attorney general's office secured a second grand jury indictment that was dismissed by a district judge and affirmed by the Supreme Court. The attorney general's office asked for a re-hearing and the Supreme Court has not ruled on that petition.

The third indictment was returned in November 1999 and that was the subject of the Thursday decision.

Sun reporter Ed Koch contributed to this report.