Walters case: No longer the ‘lock of the year?’By John L. SmithJanuary 10, 2017 at 9:57 amThe lock of the year — that’s what a cocky sports tout might have called the FBI’s insider trading case against legendary Las Vegas gambler Billy Walters just a few weeks ago.But as any sports bettor knows, the sure thing is often anything but that. And those who have followed Walters highly successful and controversial career haven’t often come away a winner when they bet against him.That’s what appeared to make this case being brought against Walters, out of the Southern District of New York, so different. It seemed impeccably investigated and, according to authorities, included an evidence trail that established that Walters gained millions and avoided millions in losses thanks to timely tips from former Dean Foods board chairman Thomas C. Davis. Davis has already signed off on his culpability and has agreed to cooperate against Walters, who faces a dozen charges related to alleged securities fraud.But, speaking of insider information, the investigation became public in 2014 when reporters for The New York Times and The Wall Street Journal published stories that contained a substantial amount of information seemingly unavailable to even experienced investors. That information, Walters’ defense has contended, was inappropriately and unethically leaked to the press by an FBI agent, identified publicly this past week as coordinating supervisory agent David Chaves.In a December interview, Chaves admitted to being a “significant source” of information to the press about the case involving Walters, professional golfer Phil Mickelson and others beginning in 2013. Although Chaves has not been charged in connection with the leak, he’s in serious trouble for putting a time-consuming case in real jeopardy.It’s hardly a secret that law enforcement, reporters, and defense attorneys have a symbiotic relationship. Each uses the other for their own purposes. Only the naive are surprised by that.But just as journalists face the threat of jail for protecting their sources, federal agents can be tried criminally for sharing sensitive case information that’s headed for a grand jury. In a case of “insider trading,” an insider leak on the part of law enforcement may be hard for a judge — and even harder for a jury — to swallow.A lot is riding on this case.Walters faces the loss of his freedom and millions in fines and forfeitures if convicted. He’s been a target of federal, state, and local law enforcement in Nevada for more than two decades. And he’s managed to beat three previous indictments involving a range of authorities from the FBI and U.S. Attorney to the Nevada state Attorney General and the Las Vegas Metro police.In addition to Bureau veteran Chaves, others have a lot riding on the insider charges Walters faces. Preet Bharara, the U.S. Attorney in New York’s Southern District, made big headlines in May when he went out front to crow about the Walters case. It appeared to be his ticket to once again putting high-profile insider trading cases on the federal front burner.It was Bharara who argued unsuccessfully in 2014 before the 2nd U.S. Circuit Court of Appeals in an insider trading case, which appeared to put the insider trading law in conflict with a separate insider case affirmed by the 9th U.S. Circuit Court of Appeals. The U.S. Supreme Court clarified the matter when it reaffirmed the 9th Circuit and ruled unanimously to uphold the conviction in the case involving Bassam Salman. That decision appeared to clear the field in the Walters’ investigation.But then came the FBI insider leak, and now multiple news reporters contend the entire case is in jeopardy.While we’re handicapping potential outcomes, let’s note that the press itself figures to be targeted by those who want to marginalize it. In fact, the reporters did nothing wrong. Working sources and getting to the bottom of criminal investigations are important parts of the job — especially in cases filled with intrigue and potential political pressure.If the Walters case gets tossed, consider it a very bad bet by Bharara, the Bureau, and even the press.John L. Smith is a longtime Las Vegas journalist and author. Contact him at email@example.com. On Twitter: @jlnevadasmith.