Federal prosecutors have laid out an interesting scenario involving millions of dollars that Outside the Lines is reporting came from PGA golfer Phil Mickelson and ended up being laundered as part of a sports gambling operation.
A 56-year-old former sports gambling handicapper, acting as a conduit for an offshore gambling operation, pleaded guilty last week to laundering approximately $2.75 million that two sources told Outside the Lines was Mickelson's money.
According to court documents, in March 2010, Greg Silveira -- a participant in "an illegal gambling operation which accepted and placed bets on sporting events" -- accepted a wire transfer of $2.75 million, which he knew was part of "illegal sports betting." The money, according to the documents, came from a "gambling client" and had been transferred into Silveira's Wells Fargo Bank account. Three days later, Silveira transferred $2.475 million and then $275,000 into another of his Wells Fargo accounts. The next day, Silveira transferred the $2.475 million to another account he controlled at JPMorgan Chase Bank.
Mickelson, who was not named in court documents, is the unnamed "gambling client," according to Outside the Lines. Outside the Lines is also reporting that Mickelson is not facing charges and is not under investigation. A reasonable person might ask just how that can be.
There are many possibilities, but chief among them is that federal gambling laws are directed at gambling enterprises and not at individual bettors.
Enacted in 1970 as part of a package of legislation known as the Organized Crime Control Act, federal gambling statutes are aimed at businesses with more than five employees and those who "finance, manage, supervise, direct or own" them.
Federal prosecutors use the word "illegal" in their description of Mickelson's money because gambling on sports is illegal under state laws except in Nevada. Relying on the state laws banning sports betting, federal agents and prosecutors typically focus their efforts on handicappers and touts who take and process the bets, collect the losses, and pay the winnings.
In the Silveira case, federal prosecutors' use of the phrase "proceeds of illegal gambling" refers not to any proceeds or earnings by Mickelson but to proceeds or income of the gambling enterprise that employed Silveira. That enterprise is not named in the court documents.
In his plea agreement, Silveira admitted that he attempted to cleanse the taint from the proceeds of a crime by moving it between multiple bank accounts. These transfers came in March 2010, very early in the three-year period that, according to court documents, Silveira was part of a gambling enterprise.
Silveira's transfers of Mickelson's money appear to be an awkward and obvious attempt to conceal the flow of resources from Silveira's criminal activity.
In his guilty plea, Silveira admitted that the prime reason for his transfers was concealment. He was attempting, as the money laundering law states, to cover up the source of the money (Mickelson), the nature of the funds (proceeds from illegal gambling) and the ultimate location of the funds (JPMorgan Chase Bank or another bank down the chain of his laundering attempt).
If federal investigators discovered that Mickelson had been complicit in the concealment, Mickelson could have been charged with conspiracy to launder his money. But in the absence of an email or a recorded conversation or an overt action in support of the concealment, Mickelson has not been and will not be charged.
By pleading guilty early in the prosecution, Silveira avoided the public filing of a detailed indictment that may have described other sports gambling he may have been involved in. Based on court filings, it appears that he began his negotiations before any public disclosure of the investigation and reached an agreement on a guilty plea to three charges of money laundering before any other charges could be formulated or filed.
In his agreement, Silveira made no promises to assist federal prosecutors or agents in any further investigation. He is obligated to be truthful in the pre-sentence investigation into his background, but he is not obligated to respond to government inquiries about his associates, his customers or his sports betting business.
It is not clearly defined in Silveira's plea agreement, but it appears likely that he will serve time in a federal penitentiary. Federal courts and federal prosecutors do not place a high priority on gambling prosecutions, and U.S. District Judge Virginia A. Phillips may consider probation when she sentences Silveira in Los Angeles on Oct. 5.