Ex-CEO Who Stole $100K From Battered Women's Charity To Cover Blackjack Losses SentencedTom Davis Receives Two Years For Insider Trading Scheme |
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An insider trading scheme involving legendary Las Vegas sports gambler Billy Walters is sending the former chairman and CEO of Dean Foods to prison.
Tom Davis, who cooperated with prosecutors to help them convict Walters, received two years himself Thursday in Manhattan federal court. Walters was sentenced in July to five years. The Las Vegas icon is currently serving his time but has appealed the sentence. Walters was also ordered to forfeit $25 million. The judge called Walters “a cheater and a criminal.”
Davis admitted to feeding Walters illegal stock tips that helped the high-stakes gambler profit more than $40 million. Walters was called “the most dangerous sports bettor in Nevada” in a 2011 report from CBS. Their scheme went on from 2008 to 2014.
According to court testimony, Davis committed the illegal activity because he was in poor financial shape thanks to his gambling and spending habits and needed money from Walters. Walters allegedly helped him out in exchange for the tips.
The court heard that Davis’ gambling habit was so bad that he once lost $200,000 in a single blackjack hand. However, he told the court that he didn’t have a gambling problem. Davis engaged in other criminal activity to cover his tracks. According to a report from the Financial Times, Davis admitted to stealing $100,000 from a battered women’s charity to cover half of a $200,000 debt he owed to Las Vegas’ Cosmopolitan hotel and casino. That debt was accrued from blackjack, which generates over $1 billion in revenue annually for Nevada’s gaming industry.
Davis also told the court that he was “enamored” by Walters, who had introduced him to golfer Phil Mickelson. Mickelson benefited from the insider trading scheme as well, but he wasn’t charged. The golfer did have to forfeit about $1 million.
Why did Davis come clean?
According to a Bloomberg report, Davis had suffered a series of health scares and apparently was concerned about an ongoing probe into his relationship with Walters. So early last year he decided to cooperate and turn on his former friend.
However, it was Davis’ financial problems that made the insider trading scheme too much to handle. “I became indebted to him,” Davis testified. “He became more demanding of me for information.” Walters has a net worth of $200 million.
In addition to the two-year sentence, Davis was ordered to forfeit $845,000 and pay $8.9 million in restitution to Dean Foods. Walters also owes restitution.
Davis is scheduled to report to prison Jan. 9.
Dean Foods is a Fortune 500 company that is the largest processor and distributor of fresh milk in the United States. The company had more than $7 billion in revenue last year.
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