Famous defendant sues DOJ officials alleging 'quid pro quo' leaking to news media

Businessman Billy Walters is suing the top officials after being released from prison earlier this year.

Published: October 21, 2020 6:09pm

Updated: October 22, 2020 7:46am

In an extraordinary legal strike, a defendant convicted in a high-profile insider trading case on Thursday sued several current and former Justice Department officials alleging they violated his rights by engaging in a "quid pro quo" with the news media that included illegal leaks to reporters.

William "Billy" Walters' lawsuit in federal court in Manhattan ironically draws from evidence the judge that presided over his trial uncovered in which federal officials admitted both that they leaked information to the media and initially hid it from the court. The tale of leaking, lying and no punishment was highlighted in a Just the News report earlier this year.

"It is no secret that, for years, federal law enforcement agents have used members of the media to promote their investigative agenda through illegal leaks of confidential information," the suit alleges. "This is the rare case in which the Department of Justice ("Department" or "DOJ") — after first falsely denying the existence of any such leaks in court papers — was forced to admit on the eve of an evidentiary hearing that illegal leaks had occurred.

The suit names as defendants the former Manhattan U.S. Attorney Preet Bharara, considered by some to be a contender for attorney general if Joe Biden wins the White House, former DOJ lawyer Daniel Goldman, who assisted the Democratic impeachment efforts last year, and the now-retired lead FBI agent for his case, David Chaves. It also names as many as 50 John Does, officials who have not yet been identified that Walters believes engaged in misconduct,

You can view the lawsuit here.

The Justice Department, which initially denied leaks in the case, eventually told the court that Chaves admitted that he and others leaked information to publications like the New York Times and Wall Street Journal. The suit alleges those leaks were designed to invigorate a case that had gone cold for years, and that the FBI enlisted reporters to assist in the probe.

"The purpose of the media disclosures was, at least in part, to establish a quid pro quo whereby Chaves would provide confidential investigative information for the reporters to use in stories, while the reporters would, in turn, provide investigative leads," the lawsuit alleges. "Chaves specifically asked the reporters to notify him if they came across information regarding Walters."

"The complaint seeks compensatory and punitive damages to be determined at trial and a judicial declaration that federal authorities violated Walters' constitutional rights to due process," the press release says. 

Walters was a larger than life figure in Las Vegas, a well-known former professional gambler, businessman and philanthropist. He was convicted in 2017 of insider trading, fined $10 million and sentenced to five years in federal prison. He was released earlier this year due to COVID-19 concerns.

The judge in the case sharply rebuked the DOJ and FBI for its conduct and demanded actions against the leakers. To date, none have been prosecuted.

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