A former food company executive who admitted feeding inside information to an influential Las Vegas gambler linked to golfer Phil Mickelson was sentenced on Thursday to two years in prison by a judge who said he was motivated by a desire to seem powerful rather than by greed.
"This was a crime that enhanced his status as a peacock," U.S. District Judge P. Kevin Castel said, ordering Dallas-based Dean Foods Co.'s ex-chairman Thomas Davis to pay nearly $9 million in restitution and to forfeit nearly $1 million for a conspiracy that ran from at least 2008 through 2014.
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The judge said Davis, 68, "paraded through Dallas as a peacock ... when he was a phony, a fraud and a crook."
"This was not a crime of greed," the judge said, adding, "It's a real shame."
Davis had a good upbringing and served in the U.S. Navy before attending Harvard Business School, the judge noted. Afterward, Davis earned more than $1 million annually before getting $10 million when the investment bank where he worked was bought.
The judge acknowledged Davis was a pivotal cooperator who testified at trial against gambler William "Billy" Walters. Mickelson had to repay $1 million in stock profits after receiving a tip from Walters but wasn't charged.
Walters was convicted last spring of making more than $40 million through illegal trading and was sentenced to five years in prison. His lawyer said the prosecution hung on a witness' lies.
The judge criticized Davis for lying to the Securities and Exchange Commission and going on a $10,000 gambling junket just days after pleading guilty even though he knew he would owe restitution and a forfeiture amount at sentencing. Davis, who must surrender on Jan. 9, apologized.
The judge also criticized Davis for misappropriating $100,000 in 2011 from a Dallas-based charity he oversaw to cover gambling debts he accumulated during a trip to a Las Vegas casino.
Prosecutors said in court papers the thrice-married Davis had lived a lavish lifestyle that included luxury travel, fancy cars, membership in private clubs and gambling trips on which he spent tens, if not hundreds, of thousands of dollars.
Davis spent so much money that he eventually sought and obtained from Walters two loans totaling more than $800,000, which were "essentially forgiven" in return for the inside information he regularly provided to Walters, prosecutors said.
The government also said Davis made revelations from the witness stand that prosecutors had not heard before, including the frequency with which he used escort services.
Assistant U.S. Attorney Brooke Cucinella told the judge that Davis was a "committed" cooperator who provided information that was "incredibly devastating at trial."
Defense attorney Benjamin Naftalis called his client's cooperation "extraordinary and crucial."
"He was the key and star witness of the trial," he said.
Davis, addressing the judge, said he was a changed man and was "grateful for my newfound humility."