Phil Mickelson Will Take 5th If Called In Gambler Case, Lawyer Says

Ed. Note: This article first appeared in Bloomberg

Professional golfer Phil Mickelson won’t be called to testify at gambler Billy Walters’s insider-trading trial because he’d invoke his Fifth Amendment right against self-incrimination, a defense lawyer told a judge.

The disclosure came at a sidebar conference between lawyers and the judge as they discussed whether the golfer would testify.

Mickelson has become a titillating sideshow in the criminal case against Walters, 70, who is accused of reaping about $43 million by trading on inside tips provided by Tom C. Davis, the former chairman of Dean Foods.

“He is on our witness list, but we understand from his counsel he would invoke his Fifth Amendment if called,” attorney Barry Berke said, according to a transcript of the conference. “So he will not be called as a witness, although his name will be mentioned."

The revelation that Mickelson is unlikely to testify is the latest twist in a high-stakes trial in Manhattan federal court against a Las Vegas legend often considered the nation’s most successful sports gambler.

Besides the occasional celebrity name, Walters’s is the most significant insider-trading case since 2014, when the courts made it harder for the government to prove the crime.

Golfing Buddy

 Mickelson isn’t accused of wrongdoing and his invocation of the Fifth Amendment would not be evidence he did anything improper.
In a lawsuit against Walters last year, U.S. regulators said the three-time Masters champion made $931,000 trading on information about Dean Foods that he got from Walters, a golfing buddy.
Regulators made no assertion he did anything wrong or that the golfer knew where Walters got his tips. Mickelson agreed to repay his earnings.

Mickelson’s lawyer, Glenn Cohen and Edward Patrick Swan Jr., declined on Friday to comment on whether their client would invoke his Fifth Amendment right if called to testify, saying only that “the government does not list Phil Mickelson as a trial witness, and the defense lists Phil Mickelson only as a possible trial witness.”

Berke, Walters’s attorney, declined to comment, as did a spokesman for federal prosecutors in New York.

In the two weeks since the trial began, neither prosecutors nor the defense has been willing to say publicly whether they will summon Mickelson to the witness stand.

Earlier this week, the golfer told a reporter that he won’t be called to testify because he’s “not a part” of the case.

He did not disclose that he’d invoke his right against self-incrimination should he be called to testify.

‘Hottest Information’

Both sides mentioned Mickelson in their opening statements with prosecutor Michael Ferrara saying that Walters passed the stock tip to the golfer because he knew he “had the hottest information in town.’’

Berke, the defense lawyer, countered that his client was a skilled investor who would have known better than to share insider tips with a celebrity, likening it to a bank robber stopping to ask a policeman for directions after a heist.

"If you’re Bill Walters and you believe someone is giving you illicit inside information, the last thing you’d do is give it to Phil Mickelson, one of the most famous athletes in the world who is going to attract regulatory scrutiny,” Berke told the jury.

Berke made the comments about Mickelson pleading the fifth during a conference with U.S. District Judge P. Kevin Castel outside of the presence of the jury on March 13, the first day of Walters’s trial.

Bloomberg News on Friday obtained a transcript of the discussion, in which prosecutors indicated they were unlikely to call Mickelson.

Featured Prominently

Mickelson has been dogged by the case since it first burst into public view three years ago with press reports about the U.S. investigation.

Mickelson was featured prominently in the news reports.

When prosecutors announced the case against Walters in May 2016, the government made no allegation that the golfer knew the trades were based on illicit information.

Mickelson “is innocent of any wrongdoing,” his lawyer, Gregory Craig, said at the time.

“Phil was an innocent bystander to alleged wrongdoing by others that he was unaware of.”

During the trial, Davis, the government’s star witness, told jurors that Walters introduced him to Mickelson and that the golfer and the gambler were members both of the Rancho Santa Fe Golf Club in California.

"They appeared to be good friends," said Davis, who has pleaded guilty and is testifying in exchange for leniency.

"I’m basing it on what I learned from Mr. Walters, and also on the occasion when I met Phil Mickelson. Billy introduced me to him on the practice tee."

In exchange for illegal stock tips, Walters is accused of helping Davis, his golfing and business pal, by lending him almost $1 million, prosecutors said.

Davis had gotten into financial straits with his luxurious lifestyle and gambling habit.

Attacked Credibility

Walters’s lawyers have attacked Davis’s credibility, depicting him as a man willing to say anything to stay out of jail. Davis has admitted lying to FBI agents and stealing money from a charity.

While Mickelson is unlikely to be called, his lawyers are watching the trial closely.

Throughout the testimony, one of his attorneys, Samidh Guha, has been sitting in the gallery listening to the witnesses. Guha declined to comment.

“I’m not part of that," Mickelson told a reporter for the Associated Press on March 22, after winning his first-round match at the World Golf Championships-Dell Technologies Match Play in Austin, Texas.

"I’m out. I won’t be called. ”

“I haven’t even thought about it,” he added. “I don’t think I’m going to say any more.” Mickelson lost in the quarterfinals on March 25th to Bill Haas.

The Fifth Amendment to the U.S. Constitution provides that witnesses can’t be forced to incriminate themselves.

Invoking the amendment generally means a witness fears his or her words might implicate them in a crime but isn’t evidence of guilt, said Jennifer G. Rodgers, a former federal prosecutor who heads the Center for the Advancement of Public Integrity at Columbia Law School.

In its lawsuit against Walters last year, the SEC alleged that Walters in 2012 urged Mickelson to buy shares in Dean Foods days before its spinoff of a lucrative unit.

At the time, Mickelson owed Walters money for a gambling debt, the SEC said.

Mickelson took a $2.4 million position in the company, the SEC said, without claiming that Mickelson knew where Walters got his information.

The investment netted Mickelson $931,000, the agency said.

The case is U.S. v. Walters, 16-cr-00338, U.S. District Court, Southern District of New York (Manhattan).

Posted by: The Trust Advisor


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