Las Vegas Sun

July 29, 2021

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Walters’ arraignment postponed after debate over presiding judge

The arraignment of politically connected golf course entrepreneur Billy Walters and two of three others indicted with him last month was postponed today while a determination is made on which judge should preside over the case.

The charges allege that Walters headed a multimillion dollar illegal sports betting operation and unlawfully transferred gambling proceeds throughout the country and even overseas.

The current case, involving the third indictment of the quartet on nearly identical charges as the first two, is now assigned to District Judge Michael Douglas. But attorneys for Walters and the others contend the case should be back in District Judge Donald Mosley's courtroom.

Mosley had been assigned the first two indictments and dismissed them both because of procedural and legal problems, although the first indictment was ordered reinstated by the Nevada Supreme Court.

Walters' attorney Richard Wright said the third indictment is a "superceding indictment" and should go back to Mosley under court rules. He asked for a hearing before Chief Judge Lee Gates to resolve the procedural conflict.

Deputy Attorney General David Thompson agreed with the process and Douglas set a Jan. 13 hearing date in Gates' courtroom.

With Walters in court today were co-defendants Jimmie Jay Hanley and computer expert Daniel Huse Pray. All are free without bail.

Not present was the fourth defendant, New Yorker John Louis Tognino, who Thompson said is "at large in the city of New York."

When the indictment was returned Nov. 19, a warrant was issued for Tognino, but he has not yet been arrested.

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 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 reindictment 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, although the third indictment may make that matter irrelevant.

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.

The prior indictments alleged that proceeds went in and out of a safety deposit box at Binion's Horseshoe hotel-casino that was in Hanley's name but disbursed at Walters' direction.

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 in pressing the indictment have said that the way Walters conducts his business is illegal.

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.