Money Washed

Pro Golfer Phil Mickelson Connected to Money Laundering, Illegal Sports Betting Case

Professional golfer Phil Mickelson was allegedly involved in “an illegal gambling operation which accepted and placed bets on sporting events,” according to a report this week by ESPN’s “Outside the Lines.” He is not actually being investigated for any wrongdoing, but it appears that he may have been the client of a man who has pleaded guilty to money laundering.

In a plea agreement filed June 18th, 2015, 56-year old Gregory Silveira pleaded guilty to three counts of money laundering, agreeing to the following three things:

First, the defendant conducted a financial transaction involving property that represented the proceeds of an illegal gambling business….
Second, the defendant knew that the property represented the proceeds of an illegal gambling business….
Third the defendant acted with the intent to promote the carrying on of an illegal gambling business….

As described in the plea agreement, at some point before February 2010, Silveira “participated in the operation of an illegal gambling operation, which accepted and placed bets on sporting events.” On March 26th, 2010, he accepted a wire transfer of about $2.75 million from a gambling client into a Wells Fargo Bank account in his own name. On March 29th, he transferred that money to another Wells Fargo account he owned in two separate transactions, one for $2.475 million and one later for $275,000. The next day, he moved $2.475 million once again, this time from the second Wells Fargo account to an account at JP Morgan Chase Bank.

Phil Mickelson Image credit: David Cannon/Getty Images

Phil Mickelson
Image credit: David Cannon/Getty Images

So where does Phil Mickelson come into play? According to two sources close to “Outside the Lines,” the five-time major tournament winner is the gambling client from which Silveira received the $2.75 million. Additional evidence was provided in the form of an initial plea agreement signed in May by Silveira and his attorney. In the opening paragraph of that document, the phrase “in the investigation of money laundering of funds from P.M.” is included. In the plea agreement filed in June, it says only, “in the investigation of money laundering.” Those initials “P.M.,” as you might have figured out by now, match up with Phil Mickelson.

When most people hear the term “money laundering,” they envision a hard-core mafia operation. In reality (well, in the reality I am imagining), Silveira is probably either just a large-volume payment processor for an offshore online sportsbook or a go-between for Mickelson so that Mickelson can keep his name off the record. Mickelson is known to be a huge gambler and he probably couldn’t find exactly the action he was looking for in the states, especially since the only place you can legally bet on sports is Nevada (this isn’t technically true, as three other states have legalized sports betting, but it is very limited in scope in those other states). Thus, while Silveira definitely did something that is against the law, it is not as bad as it might sound. And as for Mickelson, as mentioned earlier, he is not being investigated for anything, nor has he been charged with any crime.

ESPN legal analyst Lester Munson assumes that Mickelson has not been targeted (yet, as far as we know) because “federal gambling laws are directed at gambling enterprises and not at individual bettors.”

Now, if Mickelson had been involved in the concealment of the money, then he might have gotten himself into trouble. In the plea agreement, Silveira admitted that he made multiple transfers as a way to conceal the source and nature of the funds, so it was clearly money laundering, but no proof has been presented to show that Mickelson had any connection to the process other than being the person from whom the money originated. If he aided in the money laundering, perhaps by advising Silveira or guiding him to certain bank accounts (this is just me spitballing ideas), that would be another story.

This is the second time in a year that Phil Mickelson has been involved, directly or otherwise, in a financial crime. Last June, it was revealed that the FBI and the U.S. Security and Exchange Commission had been investigating Mickelson, billionaire investor Carl Icahn, and Las Vegas sports gambler William Walters for possible insider trading. The investigation dates back to a $10.2 billion attempt by Icahn to takeover Clorox in July 2011. The takeover bid boosted shares of Clorox significantly. There were apparently a number of suspiciously-timed trades of Clorox stock shortly before the takeover attempt, some by Mickelson, that allowed investors to profit handsomely. Authorities suspect that Icahn may have told Walters what he was going to do, who in turn told Mickelson. Nothing has been proven and the men have not been charged with any wrongdoing.

That same investigation is also looking at well-timed trades Mickelson and Walters made of Dean Foods stock in 2012. Icahn said he does not know Mickelson, but Mickelson and Walters do know each other.

Carl Icahn owns the Tropicana Casino & Resort in Atlantic City and, in June, acquiring the Trump Taj Mahal Casino Resort from bankruptcy court. He also once owned Nevada casinos the Stratosphere, Arizona Charlie’s Boulder, Arizona Charlie’s Decatur, and Aquarius Casino Resort through one of his companies, American Casino & Entertainment Properties (ACEP). ACEP was sold to Whitehall Street Real Estate Funds in 2008.

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