While Mickelson paid $1.9 million in gambling debts, it should be noted the 5-time major winner earned $48 million in 2012.
Five-time PGA major winner Phil Mickelson paid $1.9 million in gambling debts to William “Billy” Walters, according to documents released in the Las Vegas businessman and high roller’s federal trial on Thursday. The debt was part of a series of financial disclosures made involving 2012 stock trades by Mr. Mickelson.
Transcripts from the court proceedings show that an independent business management firm confirmed it would testify that “records show that in July 2012 Mickelson owed a debt to William T. Walters, the defendant, related to sports gambling,” if that firm was called to testify in the case.
The prosecution claimed that Phil Mickelson “transferred $1,950,000” to Walters on September 19, 2012.
The gambling debt is part of a series of financial interactions between Mickelson and Walters in 2012, including charges of insider trading. Court records show that Phil Mickelson earned $48 million in 2012, so investigators concluded that any suggestion of insider information to help Mickelson pay off gambling debts was unlikely.
Billy Walters: Preeminent Gambler
Billy Walters is recognized by many as the most success American sports bettor of this generation — and possibly of all time. Walters owns several golf course in the Las Vegas area, while owning more than a dozen car dealerships around the country. Billy Walters is charged with multiple counts of securities fraud. This is not the first time he’s been charged, but he has never been convicted before.
Part of the government’s case is the contention that Walters passed inside information to Phil Mickelson before the pro golfer bought 200,000 shares of Dean Foods, a dairy production company, on consecutive days in July 2012. At the time, Billy Walters was an executive at Dean Foods, so stock advice he gave about the company would be considered insider trader.
$930k Insider Trading Concerns
A week after buying into Dean Foods stock, Phil Mickelson sold the same shares for a $930,000 profit. Phil Mickelson does not face insider trading charges in the case, though he has agreed to pay back the proceeds he made from the trading, along with interest.
FBI’s Paul Roberts’ Testimony
The key witness in Thursday’s hearings was FBI Special Agent Paul F. Roberts. Agent Roberts testified that Billy Walters and Phil Mickelson were in communications in the days leading up to the purchase of Dean Foods stock. Both men bought shares in late July 2012, though Billy Walters had owned stock for years.
Besides the week-long period in 2012, Paul Roberts testified that Phil Mickelson has not owned stock in Dean Foods over the past few years. Lawyers for Billy Walters contend that Mickelson’s purchase of stock was based on publicly-available information that the dairy foods company would spin off a subsidiary. Government prosecutors claims that Mickelson’s stock trading was based on information from former Dean Foods executive Thomas Davis, who is cooperating as a witness for the government.
Mickelson on the Witness List
Phil Mickelson is on the witness list of Billy Walters’ defense, though the winner of the Masters in 2004, 2006, and 2010 has said that he will not be called on to testify in the trial. Last week, lawyers for the defendant told Judge Kevin Castel that the PGA golfer had told them that he would invoke the Fifth Amendment against self-incrimination, if called.
Phil Mickelson’s Career Earnings
Phil Mickelson has won $82 million during his 25-year career on the PGA Tour. He has won 25 tour events, along with 3 of the 4 major events: The Masters, The PGA Championship (2005), and the Open Championship (2013). Though he has never won the U.S. Open, Mickelson has finished second runner-up a record 6 times. He has spent over 700 weeks on the Official World Golf Ranking Top 10 list and has risen as high as 2nd in the world. His path to the No. 1 ranking was blocked by Tiger Woods in the prime of his career.
Most of Phil Mickelson’s earnings have come from endorsements, based upon his Hall of Fame career and high public popularity. For instance, Sports Illustrated reported that Phil Mickelson earned $9 million in PGA Tour winnings in 2011, but collected $53 million in endorsement dollars over the same period of time. At the time, Mickelson endorsed for ExxonMobil, Rolex, Callaway Golf, KPMG, and Barclays. Phil Mickelson is thought to be worth an estimated $300 million.
Mickelson’s Other Insider Trading Cases
This is not the first time Phil Mickelson has been involved in an insider trading investigation. In May 2014, The Wall Street Journal and USA Today reported that the U.S. Securities and Exchange Commission (SEC) and the FBI were investigating Phil Mickelson and his associates for insider trading in Clorox stock. Those reported to be involved in the probe were Billy Walters and Carl Icahn, owner of the Tropicana Resort in Atlantic City. Mickelson denied any wrongdoing. Investigators found “no evidence” and brought no charges against anyone in the case.
Similarly, SEC investigators in the current Billy Walters criminal case have concluded that Walters never told Phil Mickelson of any nonpublic information about Dean Foods. The National Review reported in May 2016 that the Federal District Court for the Southern District of New York, at the time Preet Bharara’s district, named Phil Mickelson as a relief defendant in another SEC insider trading complain.
That complaint was dropped, due to the precedent in United States v. Newman. The Wall Street Journal’s David Smyth wrote at the time, “Mickelson needs to have been aware of that personal benefit being kicked back to the original tipper, Davis. Without that knowledge, Mickelson wouldn’t be liable.”
