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Phil Mickelson paid $1.9 million gambling debt to Vegas bettor, court documents say

Federal prosecutors broke down a series of stock trades by Phil Mickelson in 2012 and identified an alleged $1.9 million debt related to sports gambling during the high-profile trial of Las Vegas businessman and renowned gambler William "Billy" Walters.

According to transcripts of Thursday's proceedings, the prosecution told the court that an independent business management firm, if called to testify, would say Mickelson was a client and that "records show that in July 2012 Mickelson owed a debt to William T. Walters, the defendant, related to sports gambling." The prosecution added that on Sept. 19, 2012, Mickelson "transferred $1,950,000" to Walters.

Walters is widely considered the most successful American sports bettor. He owns multiple golf courses in Las Vegas and more than a dozen car dealerships across the country. He has been indicted multiple times previously but has never been convicted.

Mickelson is not charged in the case. He and Walters have had a relationship for decades, often playing golf together.

The government alleges that Walters passed inside information he received from a former executive at a dairy production company on to Mickelson before the golfer purchased about 200,000 shares of Dean Foods through transactions on back-to-back days in late July 2012. According to prosecutors, Mickelson sold the shares just more than a week later for a $930,000 profit.

Mickelson has agreed to pay back the proceeds he made from the transactions with interest.

Walters is facing multiple counts of securities fraud. He has denied any wrongdoing.

On Thursday, according to court transcripts, FBI special agent Paul F. Roberts testified that Mickelson and Walters were in communication in the days leading up to both men purchasing shares of Dean Foods, a stock Walters has owned for years. Roberts testified that Mickelson had not owned any stock in Dean Foods in recent years. Walters' defense has asserted that the trades were based on publicly available information regarding a spinoff of the company, not any information from Thomas Davis, a former executive for Dean Foods and associate of Walters who is now a cooperating witness for the government.

Mickelson is on the witness list for Walters' defense. Mickelson has said he will not be called as a witness in the case. Walters' lawyers told Judge Kevin Castel last week that Mickelson's counsel had informed them that the golfer would invoke his Fifth Amendment right, if called.

Mickelson, who has won more than $82 million on the PGA Tour, including $4.2 million in 2012, made the cut Friday at the Shell Houston Open, the final tournament before Masters week commences on Monday.

Walters' trial is expected to continue into next week.