Judge Raises Prospect of Hearing on FBI Leaks in Gambler Appeal

(Bloomberg) -- A federal appeals judge raised the prospect of ordering a hearing to consider the impact FBI leaks had on the insider-trading trial of a Las Vegas gambler.

"Why shouldn’t there be an evidentiary hearing?" Judge Denny Chin asked in Billy Walters’s appeal of his conviction, for which he’s serving five years.

Walters claims FBI leaks ahead of his trial tainted the case and created evidence for the government. The trial judge rejected Walters’s request for a hearing, which could include witness testimony and production of government emails, but ordered the U.S. to give him quarterly updates on a Justice Department investigation of the leaks. Last month the judge said he could appoint a special attorney to investigate the leaks if he’s not satisfied with the progress of the government probe.

Prosecutor Brooke Cucinella told the appeals panel a new hearing isn’t necessary because David Chaves, a former supervisory agent with the FBI who admitted being a source of leaks, is being investigated by the Justice Department’s office of Professional Responsibility and its Office of Inspector General.

"The Office of Inspector General seems to have his hands full," Judge Dennis Jacobs quipped, referring to investigations that office is also conducting into whether an FBI had an "informant" who targeted members of Trump’s 2016 campaign as well as a separate probe into federal law enforcement’s handling of the Hillary Clinton emails investigation.

The judges didn’t immediately rule on Walters’s appeal.

Among those attending the appeals court hearing was John Dowd, who most recently represented President Donald Trump. Dowd said he was there to show support for Walters. He had also complained about how FBI leaks tainted the insider-trading prosecution of his client, hedge fund billionaire Raj Rajaratnam.

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