Court won’t hear money-laundering case again

By Brendan Riley, The Associated Press
Friday December 07, 2001

CARSON CITY, Nev. — The Nevada Supreme Court refused Thursday to reinstate a money-laundering case against Las Vegas golf course developer and professional gambler Billy Walters and three other men. 

The high court rejected arguments by the state attorney general’s office that Clark County District Judge Mark Gibbons erred in tossing out a grand jury indictment in the case last year. It was the third such indictment to be rejected. 

In addition to Walters, the Supreme Court decision favors his security chief Jimmie Hanley, his computer chief Daniel Pray, and John Tognino of New York. 

Justices said the state’s evidence showed that Walters’ business had “considerable contact with an alleged bookmaker in New York,” and he and the other three men frequently transferred large sums in casino accounts. 

“While such circumstantial evidence allows an inference of money-laundering in connection with illegal gambling, the state’s evidence ... is marginal,” the court said. 

The Supreme Court also criticized prosecutors for introducing prejudicial testimony about organized crime activity in New York. 

Justices said prosecutors told grand jurors that the four men were only charged with money-laundering, but “did nothing to curtail the flood of immaterial testimony concerning organized crime families.” 

The unanimous decision upholds the lower court’s ruling that prosecutors erred in letting New York City Police Detective Edward Galanek give grand jurors a rambling tutorial on organized crime operations in that city. 

The judge said there was no allegation that the Walters defendants were associated with organized crime, and it’s possible the testimony inflamed the grand jury that subsequently returned the indictment. 

Richard Wright, attorney for the four men, said prosecutors “totally ignored” Nevada law on grand jury proceedings — laws that provide much better protections for defendants than federal law. 

Prosecutors contended the men were involved in a conspiracy with out-of-state bookmakers to place illegal bets and then transport the winnings back to Nevada. 

The attorney general said that Walters had a Las Vegas phone-room operation that made up to 12,000 calls a month out of state to illegal bookies. Investigators believed Walters had Hanley handle the cash sent back to Nevada on winning bets, and had Pray maintain the betting records.