Dean Foods Davis tells insider jury of prostitutes, gambling

Billy Walters

Blackjack, patronizing prostitutes and stealing from a charity for women and children. Those were some of the vices the U.S. government’s star witness admitted to during testimony in the inside-trading trial of Las Vegas gambler Billy Walters.

Tom C. Davis, the former chairman of Dean Foods Co., also told a Manhattan jury he was enamored with Walters, who introduced him to pro golfer Phil Mickelson and was friends with investor Carl Icahn.

Even after Walters arranged a USD625,000 loan in 2010 for him, Davis said his failed investments, soaring expenses and a $200,000 casino debt forced him to siphon $100,000 from a golf charity that raised money for battered women. Davis repaid the money, but said he then “double-dipped” and withdrew $50,000 from the charity’s account to gamble and pay for hookers.

“I made a very poor decision at that period of time in my life,” a chagrined Davis said in his gravelly Texas drawl.

Davis, 68, made the admissions under questioning by U.S. Assistant Attorney Brooke Cucinella. It’s standard for a witness to disclose unsavory background information up front, rather than be forced to admit to it while questioned by a defense attorney. In that case, it might appear to a jury that the witness was trying to hide something.

Walters, 70, is on trial, accused by the U.S. of reaping illegal profits over six years based on boardroom secrets Davis passed to him. Walters made $43 million, including $17.1 million on a lucrative tip about a spin-off of a Dean Foods unit in 2012, according to prosecutors. Bloomberg