WASHINGTON, D.C. – Court documents prove jaw-dropping criminal prosecutorial misconduct in the 2017 prosecution of William T. Walters, a multi-millionaire investor, sports gambler, and philanthropist, charged by U.S. Attorney Preet Bharara in New York with insider trading.
Walters was convicted despite court documents that prove indisputably that Bharara proceeded with the prosecution after the FBI in New York engaged in a systematic pattern of leaking grand jury secrets to the New York Times and the Wall Street Journal over a four-year period, starting two years before Walters was indicted.
Now that Special Counsel Robert Mueller has consulted with Bharara and has added Assistant U.S. Attorney Andrew Goldstein, one of Bharara’s former top prosecutors, to his Special Counselor staff, the stench of prosecutorial corruption advances to the highest levels of the Department of Justice, threatening to undermine the integrity of Mueller’s investigation – an investigation President Trump has rightfully accused of being plagued by illegal leaks to the press.
In July, President Trump issued a volley of angry tweets after the Washington Post reported, again based on unnamed anonymous sources, that Trump had asked his attorneys and advisors about his ability to pardon aides, family, members, and possibly even himself as a means of “limiting or undercutting” Mueller’s Russia investigation.
In response to the Washington Post story, Trump tweeted, “While we all agree the U.S. President has the complete power to pardon, why think of that when the only crime so far is LEAKS against us. FAKE NEWS.”
Not Able to Indict
As early as 2011, the Securities and Exchange Commission (SEC) issued nearly three dozen grand jury subpoenas in an investigation of suspicious trading in the stock of Clorox, a company noted investor Carl Icahn had offered to purchase for $76.50 a share in a $10.2 billion dollar deal. Although Walters’ trading in Clorox came to the attention of the SEC, no indictments or civil complaints ever resulted from the SEC’s 2011 investigation.
On April 26, 2013, the investigation into Walters expanded when the Financial Industry Regulation Authority (FINRA) brought to the attention of the SEC trading activity in Dean Foods, a Dallas-based leading food and beverage company typically ranked as the largest dairy company in the United States, shortly before Dean Food announced its intention to spin off its dairy business, White Wave.
On May 17, 2013, the SEC shared the FINRA information regarding Dairy Foods with the U.S. Attorney’s Office in the Southern District of New York and the FBI Field Office in New York. At this time, the FBI began investigating Walters’ trading activity in Dean Foods, after learning that Walters was a long-time friend of Thomas Davis.
Through May 2014, the FBI investigation into Walters appeared to be going nowhere.
That is, not until FBI Coordinating Supervisory Special Agent David Chaves got involved.
Judge Castel Demands Answers
The federal criminal case for insider trading against noted Las Vegas-based sports gambler William T. “Billy” Walters was seriously impaired in December 2016, when the U.S. District Court Judge P. Kevin Castel in preparing to take the case to trial learned an FBI agent had leaked information on the case to the New York Times and the Wall Street Journal two years before Walters was indicted.
What the record reveals is that despite being unable to develop enough evidence to justify a grand jury indictment regarding Walters’ trading of either Clorox or Dean Foods stock, Chaves decided in April 2014 that he would prevent the investigation into Walters from going dormant by going to the press and illegally spilling juicy details from the grand jury investigation that he hoped might somehow revive the case.
When Judge Castel understood the extent of Chaves’ leaking he demanded U.S. Attorney Bharara must prepare for the court a complete accounting of the FBI leaking activity in the case – a report that Judge Castel demanded the U.S. Attorney’s office to make public in an unsealed and non-redacted form, naming the reporters at the New York Times and the Wall Street Journal cooperating with Chaves, as well as a full timeline accounting of the numerous leaks both newspapers published.
Infowars.com has posted the unsealed and non-redacted Bharara memo on Scribd.com, available here for all to read.
How the FBI “framed” Walters in a trial by newspaper
Instead of being an FBI “nobody,” Chaves held important positions in the Criminal Division of the FBI’s New York Field Office, where he served as the FBI agent in charge of white collar crime and the supervising investigator over the Walters’ insider-trading case.
In April 2013, Chaves decided he would attempt to revive the dormant case against Walters by leaking key investigative information he was developing on Walters to two prominent national publications headquartered in New York City – namely, the New York Times and the Wall Street Journal.
According to a chronology prepared by U.S. Attorney Preet Bharara, then the lead prosecutor in the Obama administration’s Department of Justice Southern District of New York office in Manhattan, Chaves repeatedly talked about the Walters investigation in a series of private “off-the-record” background meetings, phone calls, and emails with the reporters from the two newspapers, continuing through at least June 2014.
Bharara’s memo detailed that Chaves, “believing the investigation to be dormant,” held his first meeting with New York Times reporters Matthew Goldstein and Ben Protess over dinner for the first time in April 2013, during which Chaves briefed the reporters about the FBI investigation into Walters stock trades involving Clorox.
About five or six months later, in late 2013, Chaves admitted to having lunch with Wall Street Journal reporter Susan Pulliam, during which Davies also briefed her about his investigation of Walters. At the lunch, Chaves asked Pulliam to let him know if she came across any information concerning Walters.
Chaves admitted that Pulliam “from time to time” would call him to describe what she was learning, with Chaves tipping her by telling her to “check your sources” when she reported something about Walters that Chaves’ investigation suggested was incorrect.
Then, in April 2014, Chaves had another dinner, this time with three New York Times reporters, including Goldstein and Protess. At that dinner, the reporters asked questions about the Walters investigation. In response to their questions, Chaves told the Times reporters “the FBI was investigating a number of different stocks” in which Walters had made investments.
The record shows that Chaves after his initial dinner and lunch meetings, remained in continued contact with the New York Times and the Wall Street Journal reporters, that ultimately involved Chaves switching to his personal email account and to his personal cellphone.
Bharara’s report also noted Chaves and the reporters left voicemail messages to reconnect when efforts by the reporters and the FBI Special Agent to speak by phone initially failed.
This is the second in a series of exclusive Infowars.com reports detailing how government impropriety in U.S. Attorney Preet Bharara’s Manhattan office prosecution of William T. Walters has contaminated Special Counselor Robert Mueller’s “Russia Collusion” investigation – another FBI-driven investigation plagued by a systematic pattern of illegal leaking to the press.
The first article, entitled “Why U.S. Attorney’s Criminal Leaks Threaten to Derail Mueller’s Russia Probe,” was published last Thursday and can be read here.
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