Out of all the things I have ever read, this story does the best job and looking into how a professional betting syndicate works. It also sheds some light on this who ask why guys like Vegas Runner play so much volume. It is a long read, so sit back and enjoy:
The Story of The Computer Group
By Ian Thomsen
Billy Walters In Las Vegas at one of his many land developments
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He was in the bed sleeping when the two men walked into his bedroom. Billy Walters sleeps in a big clean bed in Las Vegas, in a small but elaborate home renovated to his liking, with palm trees and white flowerpots and two satellite dishes in the yard, and four large televisions in the den, and a security guard who sits just out of sight behind the shrubs across the street. This environment was disrupted early last Jan. 5, when the two strangers introduced themselves to Billy Walters with all the subtlety of an alarm clock. He greeted them by sitting up in the bed, blinking. His wife wasn't in the bed with him. They already had her, probably.
"You're going to have to get dressed," one man said. Billy Walters reached down for the pile of wrinkled clothes he had worn the night before. The room was quiet. The men watched him dress.
"We don't like to have to do this to you," the other man said.
His wife Susan was downstairs with a third man in the kitchen. There was not a lot of chit-chat. Susan and Billy Walters were led across their fine, trimmed yard in handcuffs. The path to law and order wended past a copy of the daily newspaper, which lay on their driveway like an upturned headstone. As Billy Walters glanced down at the headline, he realized that he was the front-page news:
INDICTMENTS TARGET BETTING GROUP IN LAS VEGAS
As he tells it, what steams Billy Walters most of all was the sight later that day of his pretty wife in leg irons, chains scraping the floor as she staggered toward him. Afterward, when they had been released without bail, she revealed how the manacles had eaten through her stockings.
Seventeen days later Billy Walters and 16 associates held the first meeting of the legendary Computer Group. This was a celebrated occasion in gambling history, and long overdue. The men and women of the Computer Group had been pioneers in their field. All the Computer Group did, apparently, was wager money on college football and basketball games, but for five hysterical years they did it better than anyone else ever had. It was almost as if they had invented junk bonds. Every season the cash arrived by the millions, all because their computer told them which teams should be favored to win everything from the mammoth Ohio State-Michigan football game to the basket-ball game pitting Monmouth against Fairleigh Dickinson. The Computer Group did not fix games. It simply understood them.
The group began to assert its mastery of sports betting in 1980, when the computer as an everyday machine had no firm place in sports. Most of the big Las Vegas players of 1980 were still relying on their own good sense and whatever trends they could pick up. A computer seemed to them a gimmick from the future, a big blinking queen-bee serviced by men in white coats. There were relatively few of these "personal computers" that are everywhere today. As a matter of fact, the Computer Group didn't even own its own computer. Until 1983. the group settled for renting time on a computer 2,400 miles away in Rockville, Md. As for the group's invaluable program, it was maintained on thousands of clumsy old "batch" cards, kept in shoeboxes, then fed to the computer like hay into a thrasher.
Although dozens of workers served the Computer Group, only one man communicated with the machine itself. He was Michael Kent, a 34-year-old mathematician who had spent II years helping to develop nuclear submarines for Westinghouse. He found such work boring. In 1979 he quit his job and moved to Las Vegas, to bet on football games. In 1980 he became partners with a man he hardly knew, an orthopedic surgeon. Dr. Ivan Mindlin, who Kent says agreed to place bets for them on a 50-50 basis, in accordance with his computerized forecasts. In the 1980 season the computer wizard and the doctor shared winnings of $100,000 playing college football. By 1983 they were winning almost $1 million in one week of college football - or, at least, that's what Michael Kent was told. He never bothered to check the books.
By then Dr. Mindlin had built their little corner business into something resembling a national conglomerate, which had opened betting offices staffed by a dozen employees in New York and Las Vegas. The Computer Group had burgeoned into the first truly national network of sports bettors, able to buy up the best point spreads from coast to coast. At the height of its powers, the Computer Group of 1983-85 wielded more influence over the millions of Americans who bet on sports than any superstar athlete or Super Bowl franchise. Yes, it was even more important than the split-fingered fastball. In its sleekest moments, the Computer Group had as grand an effect upon its constituency in the 1980s as OPEC had upon American consumers in the 70s.
As its influence grew, the Computer Group became something of an underground social club, extending an unofficial membership to at least one smalltime hoodlum, as well as sharing information with the likes of lrwin Molasky, the powerful real estate developer and Las Vegas civic leader.
Profits were staggering. The group never had a losing season betting on college football or college basketball. According to figures compiled recently by Michael Kent, the Computer Group in 1983-84 earned almost $5 million from wagers on college and, occasionally, NFL games. Yet Michael Kent suspects that his records are incomplete. They do not account for personal bets made by Dr. Mindlin, or Billy Walters, or by the dozens of other associates who had access to the Computer Group's information. By the time everyone had exhausted Kent's forecasts in the 1983-84 sports year, they might easily have earned 110 million, perhaps $15 million. Perhaps more.
"When you worked it down all the way to the bottom," says Billy Walters, "it might have been 1,000 people using our information."
Finally, in 1987, success got the best of them. They had to break up, just like the Beatles. Despite all the time they had spent working together, the members of the Computer Group had never really known one another. In most cases they had spoken only by phone, in staccato conversation, using code names. Faces rarely had been attached to voices. And so, as their legend had grown in recent years, it was only proper that these reclusive celebrities be united last Jan. 22 in Las Vegas, to shake hands and wonder where all the time had gone, as 17 of them assembled in Courtroom No. 4 of the Foley Federal Building, awaiting their arraignment on 120 counts of conspiracy, gambling, and racketeering charges.
Among these Garbos there were two their partners most wanted to see: Billy Walters, gambler of gamblers, who had come to Las Vegas in debt and was now a millionaire; and the treacherous doctor, Ivan Mindlin, whose cunning had built the group up-and then led to its demise.
On the day they were arrested, just two weeks before the five-year statute of limitations on their case would have run out, Billy Walters sat in a holding cell with Dr. Mindlin and a third member of the group, Billy Nelson. Dr. Mindlin wore his hair longer than Walters remembered - combed back, until it splashed against his shoulders. The three of them were discussing their contempt for the FBI, and, in particular, the ambitious special agent Thomas B. Noble, whose investigation of six years had uncovered so very little. Walters and Nelson went back and forth in their denigration of Noble, using many unpleasant terms, until finally the doctor spoke up. Walters recalls Mindlin saying: "Yeah, and can you believe that S.O.B. told two people that, if they'd tell him how I killed my wife, he'd go easier on them?"
Now, in the courtroom 17 days later, his former colleagues whispered about Dr. Mindlin. He was the most intriguing presence among them. Yet he sat alone in a corner, as if he were the least popular boy in school.
In groups of four they were called to the bench of U.S. Magistrate Robert Johnston. Dr. Mindlin's was the first name called. Each man and woman was asked about his or her education, and it turned out that all had attended college, with the exception of Billy Walters. Then the magistrate wanted to know how they intended to plead.
"Not guilty," each of them said.
"Not guilty," the magistrate repealed each time, a little sarcastically. He then proceeded to set all the gamblers free, on their own recognizance, and several of them hurried back to their homes, for there were games that night, and wagers to be made.
In a room alone, just he and his computer, Michael Kent was simply another technology dweeb. But plug him into a network of bettors, and now, with the flick of a switch, Kent was utterly brilliant, a mastermind. These dozens of betting agents, or beards, as they are called, were as essential to Michael Kent as the electrical juice that drove his computer. He could not begin to succeed without them. And so, each day, without equivocation, he turned over his forecasts of the upcoming games to Dr. Ivan Mindlin, who then passed them on to his New York partners, Stanley Tomchin and Jimmy Evart, who, until 1984, were responsible for placing the majority of wagers for the Computer Group.
Dr. Mindlin had been making personal bets through Tomchin and Evart long before the Computer Group was formed. According to a partner in the group, Mindlin had built up a debt of some $100,000 to Tomchin and Evart when Michael Kent came along in 1980. By offering Kent's computer information to them, Mindlin was able to work off his debt quickly.
Tomchin and Evart were so impressed with the accuracy of Dr. Mindlin's information that they agreed to move money for him on a regular basis. Their colleagues describe Tomchin and Evart as a pair of Ivy Leaguers, more erudite than the normal gamblers. Tomchin, a Cornell alumnus, was a world-class backgammon and poker player; his friend Jimmy (Sneakers) Evart was said to have attended Harvard. Tomchin and Evart were well known in New York gambling circles as the "Computer Kids."
In 1983, when Billy Walters began making bets for the Computer Group, he often received his orders from Tomchin and Evart. The Group's main betting pool was wagering $40 million per year, but all the action in the world could not sustain Evart's interest. His newlywed wife insisted that he stop gambling, and so, in 1984, he walked away from the money and moved to Spain. According to a former partner, Tomchin moved to San Francisco and eventually left the group . His former partners say he is now an options trader in Santa Barbara. Tomchin declined to answer questions in connection with this story.
The Computer Group foundered in Evart's absence until October 1984, when Dr. Mindlin offered Billy Walters a percentage of the group's winnings and placed him in charge of moving the weekly millions. At that time Walters worked out of a lovely three-bedroom home overlooking the eighth fairway at the Las Vegas Country Club, Indeed, Billy Walters wore clothes suggesting that he had been called in from the golf course. His gray speckled hair was styled straight back. away from his thin face. its expression creased by the transitions of gambling, from sadness to happiness and then back again. His face was older than his body. He was always thinking about work. He had been assigned (he enormous responsibility of exploiting the weakest betting lines, and it did not matter where they were. Billy Walters was supposed to find them. and where they failed to exist, he was expected to create them.
He was a powerful broker in an unregulated industry. Walters blanketed the country with bets, taking action wherever it was available, which was at times in as many as 45 states. In 44 of them he dealt exclusively with illegal bookmakers. To help bear that burden he hired six people to work for him in Las Vegas, at a salary of no more than $700 per week, plus the occasional bonus. His wife served as an accountant, but he depended most upon his young assistant, Glen Walker, who had quit his job in the publicity department at NBC Sports in New York and relocated to Las Vegas, so enthralled was he by a 1980 story in Sports Illustrated about Las Vegas gambler Gary Austin. "That copy of Sports Illustrated changed my life," Walker says today.
Billy Walters maintained a low profile in Las Vegas. If he appeared at a sports book it was usually around midnight. when he might come to open a betting account with $100,000 or more in cash - however much he could fit in a Famous Amos Cookies bag. As for more public matters, he preferred that business be conducted by Glen Walker. So Walker would visit the Las Vegas sports books each day, to settle up or place bets, and fend off the legions of bettors who wanted to know which games the computer liked that week. He worked with three other group employees at the "C&B Collection Agency," which was a front for their betting operation. His colleagues would meet there, at an office park on Spring Mountain Road., when they weren't moving money out of Billy Walters' house.
Perhaps Walters' favorite employee was gentle Arnie Haaheim, a big bright laughing man who was unable to mask his tremendous emotions. He liked women - liked to talk about them, actually, until he was all talked out. Then, says Walker, Arnie would stare off, leaning on his elbow, as passive as a solar cell at dusk. All around him phones were ringing and money was being wagered in thick sexy wads, but Arena would just sit there, his jaw hanging open while Billy Walters shouted orders.
By and large, though, there was little humor in their work. On a Saturday of college basketball they might bet 60 games, which required that they be aware of every injury, casualty and rumor surrounding all 120 teams. They had to chart the movement of the point spreads in various sports books for each game. They had to find the weakest lines, and they had to make and keep track of their wagers by the hundreds. They worked almost every day from September through March. Some days they would start at 6 a.m. and finish at midnight. Always Walters felt obliged to protect the Computer's information from the public, because these numbers were as valuable to him personally as they were to the group. His employees never even heard mention of the name Ivan Mindlin. The voice delivering the daily betting orders was known only as "Doc" or "Cowboy," and Billy Walters would say nothing more to identify him.
Occasionally, however, it paid to be careless. On a Wednesday afternoon, ever so casually, Billy Walters might tell Glen Walker to make a call over to the old Gary Austin Sports Book on the strip. "We want to lay $30,000 on Wisconsin giving 3 to Purdue," Billy Walters would tell him.
Walters knew that several wise guys would be passing time near the counter at Gary Austin's. And they would notice that the line favoring Wisconsin over Purdue would rise to 3 1/2 points. And they would ask who was responsible for moving the line, and they would be told the truth: That $30,000 had just been laid by the computer. And then..
The wise guys would bet on Wisconsin themselves. These wise guys would whisper to other wise guys. Tout services would hear that the computer liked Wisconsin. A run would begin on Wisconsin. News of Wisconsin would spread nationally. By the time word reached the man in Louisiana or the woman in Illinois, there would be no mention of the Computer Group. They would simply be told that they had better get something down on Wisconsin. You can see now that the betting market in Las Vegas is no different than Wall Street. Fed by rumor, speculation and greed, a stock like Wisconsin can grow hot for no substantial reason.
By Thursday or Friday, Wisconsin might be inflated to a 5-point favorite, 5 1/2 in some markets. At this point Billy Walters believed the price could rise no higher, and so he would marshal his forces: "Open order on Purdue taking 5!" In moments, they would be on their speed-dial phones, reaching every available source nationwide, betting as much as they could wherever Purdue was a 5-point underdog. They were a frantic yet focused group inside the "C&B Collection Agency," attempting to flood all the markets simultaneously, before the point spread could drop. Into one phone they would shout a few words and then hang up while dialing another number on another phone, back and forth, until they were frazzled. In two minutes Walters alone could place bets through a dozen beards or bookies.
So: On Wednesday they'd bet against Purdue. to lower its value in the market. Now on Friday they were buying as much Purdue as they could, a grand total of $1 million or more. And wouldn't you know it: Sometimes Wisconsin would beat Purdue by 4 and the Computer Group would win the "middle" - bets on both teams paying off in the same game.
Now and then, Billy Walters fooled his own employees. Glen Walker recalls more than one occasion when Arena Haaheim laid his own money on the first team (in this case Wisconsin) only to find out later in the week that the Computer had preferred the opponent (Purdue) all along. On Saturday they would sit in Billy Walters home and watch the game on television. "Arena, what's the matter?" Walters would say. "I don't see you cheering over there."
No betting operation bad ever controlled the market on such a synchronized and national level, but Billy Walters admits, he didn't always have his way so easily. "There were other times I bet $130,000 or $140,000 just to move the line," he says in his low Kentucky drawl. "One thing about the public, they'll follow anybody as long as you're picking winners,"
Because they pay a 10% service fee to the house on all losing bets, professional gamblers have to win 52.38% of their games just to break even. Records of the 1983 college football season seized from Dr. Mindlin show that the Computer Group won an incredible 60.3% of its games against the spread. The Computer Group's main betting pool began that season in September with a $1.1 million line of credit, and concluded Jan. 2 with $5 million cash.
Of course, in those days the official point spread was softer than mayonnaise. The mathematical wizard Michael Kent admits that the Computer Group might never have risen to prominence if not for the removal of Bob Martin, who since 1967 had been making the official line for Las Vegas. However, in 1980, Martin was sentenced to 13 months for the crime of transmitting wagering information across state lines by telephone. If the federal government had not gotten rid of Bob Martin, then the FBI might never have felt compelled to spend six long years investigating the Computer Group.
More often than not, Michael Kent's line was more accurate than the official line in Las Vegas. Line-makers will argue that the only purpose of their official line is to entice betting action on both sides, that they are not responsible for outsmarting experts like Michael Kent. Nonetheless, the people who were making that line in the early 1980s were a particularly feeble lot.
Other gamblers noticed the same weaknesses, but they couldn't take advantage to the same extent as the Computer Group. "They had some amateurs setting the line at that time, and the line was very weak," says Lem Banker, whose nationally syndicated newspaper column made him perhaps the most famous gambler in Las Vegas. "It was a good opportunity to win, and a lot of people did."
Greater than any individual, the mysterious Computer Group emerged as the prominent voice in Las Vegas, much like a Wizard in Oz. "When a handicapper gets going good, a 'following' phenomena goes into effect," says Michael (Roxy) Roxborough, now the top Las Vegas linemaker, whose services are purchased by 35 sports books. "A game might open at 3 [points], and the followers raise it up to a 6. With these computer guys, every time a game moved, they were the ones credited with moving it, whether they did it or not. Their legend may be larger than they actually were."
The top gambling rings today use the Computer Group as their model. In Las Vegas, a classroom genius like Michael Kent has to depend entirely upon someone like Billy Walters, who was educated in alleys. "There is no gambler's college," Walters says. "Everything I know, I learned the hard way. Now, how do I know when the spread has risen as high as it's going to get? I have to depend upon my years of experience. I use my feel and the information I get from my contacts around the country to decide when I should bet and when to back off."
Sitting at his desk each day, Billy Walters based his decisions upon numbers he wrote on two pieces of paper. On one page was a list of point spreads compiled by Michael Kent's computer. In the case of Wisconsin at Purdue, Kent might have decided: Purdue -I over Wisconsin. On the second page Billy Walters was keeping track of the official lines at various sports books in Las Vegas. Wherever he could find a difference of I '/2 points between the Computer Group's line and the official Las Vegas line, he would bet on that game. If the official line decided: Wisconsin -5 over Purdue, then what Billy Walters had here was a massive 6-point difference of opinion. In such a case he might bet $1 million on that game. The greater the difference, the more he would bet (see box, p.40).
So confident was the Computer Group that its weekly wagers often exceeded the ceiling of its betting pool. According to ledgers seized by the FBI, Michael Kent's group in one week wagered $4,571,050 on college basketball games alone - more than twice as much as its reservoir in the pool at that time. Including the college bowl games and the NFL play-offs. the group bet more than $5.5 million that week, turning a profit of almost $700,000.
And that represented the work of Michael Kent's tiny group. Dozens of other bettors had access to his information. Who knows how much additional revenue they earned?
Billy Walters claims that he gambled more than $500,000 of his own money each week with the help of computer information. He is just one of many big winners whose profits do not appear on the group's ledgers.
Even though he tried to gamble like the button-down brokers on Wall Street, Walters admits that he too fell victim to the occasional betting frenzy. During the Christmas holidays six years ago, Walters found he was betting hand over fist on Michigan in the Sugar Bowl against Auburn. It was one of those rare times when the tout services were opposing the computer on a major game. No matter how much Billy Walters bet on Michigan for the Computer Group and for himself, the line remained the same. The public kept laying money on Auburn, giving 41/2 points.
"I kept betting on the game, and the line kept coming back, so I just kept betting," Walters says. "I guess I got a little carried away. I had more than $1 million on that game. I literally bet my entire net worth on that game, and probably some additional."
Trailing 7-6 in the fourth quarter, Auburn took possession at its 39 with 7:44 left. If Auburn scored a touch-down to cover, Billy Walters would lose $1 million. But Auburn kicked a 19-yard field goal to win, 9-7, and Billy Walters is today a rich genius.
The Computer Wizard
One day Michael Kent, who was the centerfielder, got to wondering about his company softball team. How good were he and his teammates, really? When they destroyed a poor opponent by 15-4, was that as impressive as beating a good team by 6-5? His team had won a couple of league championships, but what had they really accomplished? All his life he had found answers to such questions in numbers, statistics. He simply had to find out what those numbers meant. What was the numerical definition of a good softball team?
His thoughts drifted naturally in this direction. Kent was a 27-year-old math-' mathematician at Westinghouse in suburban Pittsburgh. Every day he worked with computers. to help design a better nuclear sub. At night, he says. he began to formulate a computer program that rated the strength of his softball team. Each week he would update the statistics, then feed the information into the high-speed Control Data computer at Westinghouse. His teammates were interested in this output of statistics - it was flattering to them - but Michael Kent ultimately was disappointed by the results. When (he work was done he had a printout listing his team's strengths and weaknesses. So what? He had given order to these numbers, but there was no application, no further use for them.
He says he began work on a more complex program. The game was college football. This time he could foresee a dollar sign in front of the numbers. The year was 1972. He recorded information from old NCAA football guides, which list the scores and statistics from the previous season. Then he visited the library, the old newspapers in particular, in order to see which teams had been favored each week, and by how many points. He examined the spreads and the slats. attempting to find a correlation. Which statistics, he wanted to know. were important in assigning a point spread?
He knew of only one way to find out. He began to write a program. The computer would ask hundreds of questions in algorithmic. pinpointing strengths and weaknesses for each team. As his wealth of information grew, Kent learned that some strengths were more important than others. There was a value to first downs and there was another value to yards gained. Home-field advantage had a value. So did strength of schedule. So did success against common opponents. The list of questions went on and on, some so picayune that the average football fan might have laughed in the face of this stocky, bespectacled mathematician. Billy Walters believes that the program even accounted for the distance of the visiting team's road trip.
The hobby soon became his vocation. He began to test his model by placing bets with local bookies. He says he worked an average of two hours per night over the course of seven years, fine-tuning his football program and developing a similar program for college basketball, until one morning he walked into the plant and quit his job. He was very quiet about it. Only his closest friends were informed of his plans. He moved to Las Vegas in lime for the 1979 college football season. For the last seven years he had been saving his money, to wager on football and basketball games. Still, when he looked in the mirror, it was a hard thing to believe, that the person staring back at him was a professional gambler.
When Michael Kent arrived in Las Vegas, he clearly was on his own. No gambler of note was depending solely upon a computer to analyze bets. Allow yourself to go broke because of a machine? That was crazy thinking. But Michael Kent didn't know anything about Las Vegas common sense. He was from Pennsylvania. He wanted to know where he should do his laundry. On a daily basis he wanted to bet as many games as he could, whenever he perceived the slightest 1 1/2 point advantage, and this was more crazy thinking. Common sense in Las Vegas said that you couldn't win big by betting a lot of games. You should concentrate on just a few games. That's what common sense said. Michael Kent didn't know about that, either. Most of what he knew about this business was contained in a book called Theory of Gambling and Statistical Logic, by Richard A. Epstein. Chapter 2 told him the percentage of his money he should bet, depending upon how much he liked the game. The book was written in the language of numbers. Michael Kent wanted to meet this man Epstein.
The job of betting sports fulltime was a little harder than he had imagined. Kent would wake up early, update his information from the morning newspapers. tap into the Control Data computer on which he was renting time, and establish a belting line for each game. Then he and a friend would spend the rest of the day and night visiting sports books and private bookmakers, seeking out the most favorable point spreads. He was not instantly successful.
"That first football season was curious," Kent recalls, speaking by phone from Las Vegas, under the supervision of his attorney, Steven Brooks of Boston. "l started real well. Then in midseason, there were five big games, and I lost all five by a point, by a half-point. by a missed field goal. All crazy things. It put me down. and for the rest of the year I'd lose every week."
According to his records, he lost $40.000 that football season. His bad luck continued two months into the basketball season.
"I was getting killed," he says. "I was at the point where I was debating what my future was going to be. Then, I remember, there were 17 games I was betting one night, and I won 16 of the 17. That was a definite high. to get me back on the plus-side."
He found that betting the games was an awesome responsibility. It was not an easy thing to settle up with a bookmaker after each round of bets, carrying huge bundles of cash in and out of public places. Whenever he had a lot of money on him, he feared he was being followed. If he happened to notice two men walking behind him on the sidewalk, he would run as fast as he could into the nearest casino, and stand near a security guard for a while. Of course, this only drew more attention to himself. He asked security guards to escort him to his car whenever feasible. He also depended heavily upon valet parking. He didn't like the idea of carrying 150.000 into a dark garage. Valet parking was much safer. He didn't know how to just be cool about it. He couldn't chill out. He was working 80 hours a week in the strangest city in America and he was always worrying. He won $150.000 betting college basketball in 1979-80, but it was a terrible way to live.
He gave betting one last try for a football month in the fall of 1980. Exhausted, with no alternative but to go home, he says he placed a call to Dr. Ivan Mindlin. He had met the doctor once before. In 1979, while playing tennis with fellow gambler Billy Nelson, Michael Kent had mentioned his use of a computer in betting. Nelson had said that Kent should meet this Dr. Mindlin. "I thought they could help each other," Nelson said in a deposition year.
They seemed to understand each other. When Kent arrived at Mindlin's house on Ottawa Drive, the doctor explained that. quite ironically, he had been attempting to forecast major league baseball games by use of a computer program. When Michael Kent heard this. in 1979, he felt almost as if Dr. Mindlin was a brother. In 1980. when they began to work as a team. he came to think of Dr. Mindlin )as a father. Later Dr. Mindlin would place his arm around Michael Kent and say that they were, as gamblers, married to each other.
Years later, Kent's attorney marvels at the hypnotic grip Dr. Mindlin maintained over his brilliant yet woefully naive client. Says Steven Brooks, "I would sit down with Michael for hours, discussing different parts of his arrangement with Dr. Mindlin. and I would say: 'Why did you do this?' And he would say, 1 don't know.' It was incredible. He didn't know why they were doing anything. He just trusted Ivan completely."
In 1982 Michael invited his older brother John Kent to mow-to Las Vegas. Michael taught John how to feed data to the computer, training John to work for the Computer Group. Later, Michael would invite another brother, and even his mother, into the betting pool. Michael's success provided wonderful experiences for all of the Kents. Michael was earning hundreds of thousands of dollars each season. and he wasn't even paying taxes on it. He was depositing his winnings with banks in the Bahamas and Switzerland, the same banks that Dr. Mindlin was using, according to Kent.
Only in the last few years did Michael Kent begin to understand the full extent of his creation. As far as he knew, the Computer Group consisted of himself, members of his family. Dr. Mindlin and a few others who helped them make bets. From 1980 through January 1985, he figured that his group had wagered close to $140 million and turned a profit $14 million. The idea that his information was earning two or three times that much without him getting his fair share ... well. he never really came to grips with the possibility that anything unethical could come of his work.
While other regular players in Las Vegas schemed and flattered Dr. Mindlin in their vain attempts to gain access to the Computer Group's information, Michael Kent walked freely through town, blissfully anonymous, unaffected and ingenuous, the neon reflecting from his glasses.
His enemies, who are many, exult in spreading rumors that portray Ivan Mindlin as a doctor ruined by his gambling. They say that he would listen to baseball games while performing surgery to the detriment of his patients, and that he would leave the operating room to gather up the scores. In reality, Dr. Mindlin enjoys an excellent reputation as an orthopedic surgeon, according to three respected Las Vegas attorneys who specialize in medical cases - all of whom approved Mindlin to give objective medical examinations for use in court cases. "A doctor would have to be highly thought of to be approved by both sides in a case," says attorney Bruce Alverson, who lauds Dr. Mindlin. Attorney Neil Galatz expresses sadness over Mindlin's recent legal troubles with the Computer Group. "It's a shame," he says, "because he was a fine doctor."
Lem Banker, the famous sports bettor, says he has been a friend of Dr. Mindlin's for 30 years, since he served as house physician for hotels on the Las Vegas strip. "He was my doctor," says Banker. "I actually showed him some of the finer points of handicapping. Sometimes we'd stop into the hotels and go partners, shooting craps. I had a lot of respect for his mind."
Though the doctor reportedly had a good run playing the horses, one of his partners says that Mindlin was a loser betting on ballgames - that by1980, the doctor had run up a $100,000 debt to a pair of New York bettors, Stanley Tomchin and Jimmy Evart. Dr. Mindlin was able to work off that debt in October 1980, when Michael Kent dropped by (like manna from heaven) to discuss his computer program for handicapping football and basketball games.
As he spoke, Michael Kent could not have been very impressive to a man like Ivan Mindlin. Kent was something of a Lt. Colombo in that regard. He did not speak elegantly. He wore drab clothes. He said he had grown up in Chicago as a Cubs fan. And he looked like a Chicago Cubs fan, just in from the bleachers. To Dr. Mindlin he must have looked like a pigeon, with a beard and glasses.
Kent said he had grown weary of betting the games himself. What really tired him, he said with all sincerity, was having to deal with such large amounts of money. The chores of betting were wearing him out. He says he and Dr. Mindlin agreed: Kent forecasts the games, Mindlin makes the bets, and they split the winnings 50-50.
With their handshake, the Computer Group was formed. And from that day forward, Dr. Mindlin took it upon himself to insulate Michael Kent from the outside world, just as Kent had wished. Kent was left alone to work with the numbers, while Mindlin took care of the streets. Mindlin apparently loved the streets, where he was deemed something of a Renaissance man, a street-smart manager who knew how to move truckloads of money and an intellectual genius as well. As time went on and the group's profits soared, he began to take more and more credit, until it was common knowledge throughout Las Vegas that he - Dr. Ivan Mindlin - was the inventor of the Computer Group's invaluable program.
In March 1986. Sports Illustrated became the first national publication to report the story of the Computer Group. Dr. Ivan Mindlin explained to the magazine that he had taught himself computer programming while serving on the faculty at Monmouth Medical Center in Long Branch, N.J., the first hospital in the country to have an IBM computerized record-keeping system. Mindlin told an intricate tale, of how he'd run 25,000 past college basketball games through computer services from coast to coast so see how accurate the pregame spreads were against the final score. The magazine reported that Mindlin "devised his own programs to make a number' on each game, and that he serves as the alleged mathematical mastermind behind the mysterious Computer Group, which just might be the biggest known sports betting ring ever established anywhere."
The name of Michael Kent was mentioned nowhere in the story.
Though many members of the Computer Group might have thought that Dr. Mindlin was the grand inventor, there is very little to support that view. Those partners of Dr. Mindlin's who agreed to give interviews all maintained that Michael Kent invented the group's program for handicapping football and basketball games. The only program Dr. Mindlin produced was for betting on major league baseball, and they say it was a failure.
Dr. Mindlin has declined to comment on this and all other matters. His attorney, Morris Goldings, is evasive when asked who invented the group's programs. "We're not getting into the vanity of it," he said recently from his car phone. Last February, however, Goldings said bluntly: "What does Kent say? That he was the brains and Mindlin was the beard? That's our position too."
Each day Kent and his brother John collected the statistical data for every team, fed it into the computer, updated their program. fine-tuned all of the forecasts and then dumped them into a computer file to which Mindlin had access. From that point on. Kent -who was either too busy or too gullible to notice the fence that Mindlin was constructing around him - abdicated all responsibility to the doctor.
Dr. Mindlin's responsibility was so relay the information to Stanley Tomchin and a few other beards (or betting agents), who would survey the market and make the bets. Those phone calls and his accounting duties for the group were the extent of Mindlin's workload, but other matters kept him busy.
To the doctor's credit, the Computer Group grew very quickly under his direction. As they were beginning to earn millions each season, Dr. Mindlin was injured in a 1981 car accident in Florida, which left him unable to perform surgery. He applied for disability insurance, and his practice was limited to giving expert testimony in medical cases.
As his reputation as a gambler grew, he was able to strike up an acquaintance with Irwin Molaksy, mighty Las Vegas developer with whom Mindlin reportedly shared "his" computerized information in exchange for Molasky's friendship and all the avenues it might open up to him.
Now street-famous for his work with the Computer Group, Dr. Mindlin entered into the commodities business. Once more he turned to Michael Kent and Kent's friend, Mark Ricci who began work on a program for predicting the price of commodities futures. Based on their efforts, Dr. Mindlin farmed a private commodities firm he called Commend, which may have served him in several ways. For one, he allegedly was able to launder money through Commend. Michael Kent's brother, John, in a sworn deposition last year. testified that he received $112,695 from Commend for his work on the Computer Group's sports data base. John Kent testified that he never did any work for Commend.
Dr. Mindlin also found that commodities could serve as another point of contact with Irwin Molasky, who invested with him through Commend, according to Molasky's attorney Stanley Hunterton.
Mindlin also established a relationship with Dominic Spinale, who reportedly was a smalltime hoodlum with ties to Chicago mobster Tony Spilotro. Spinale happened to be under investigation by the FBI at the time his name was being used by Mindlin to open a betting account at the Stardust Hotel. If Mindlin could change one thing, he would probably never have become friendly with Spinale, which might have averted all of the troubles that engulf him today.
Special Agent Thomas B. Noble has developed quite a reputation in the FBI for his six-year investigation of the Computer Group. Quite sad, really. "He got himself in a jam," says a fellow special agent. "He was a rookie when this thing started. Everybody was saying, Forget about it, you haven't got anything.' But, somehow, he convinced one of his superiors that it was bookmaking, and got him to go along with it. He (Noble] is always saying how every case he's working on is the greatest thing. In the end, it never works out."
Thomas Noble says that joining the FBI was "just something I had always wanted to do." He was made a special agent in 1982 and was assigned to Las Vegas a year later. He had not been there long when a gambling investigation of Dominic Spinale led him to Dr. Ivan Mindlin, who had opened a betting account at the Stardust Hotel in Spinale's name. A muted alarm began to ring between the ears of Thomas Noble. This had the look of a betting operation run by La Cosa Nostra. The Mafia. Organized crime.
Soon after he had been questioned by the FBI about Spinale, Dr. Mindlin began to spend more time at his house in Vail, Colo. A second alarm went off.
The subject seemed to be distancing himself from Spinale, his LCN (La Cosa Nostra) contact. Noble traced a check endorsed by Spinale to an account maintained by Michael Kent Kent referred the FBI's inquiries to his attorney. Another alarm. Michael Kent had the same attorney as Ivan Mindlin
Spinale was next observed by FBI operatives associating with a young blonde subject named Glen Walker, who walked with a pronounced limp (the result of a high school football injury). Walker was trailed to an establishment called "C&B Collection Agency." Further investigation indicated that the "C&B Collection Agency" was not actually a collection agency but was in fact the front for a gambling operation. Informants led special agent Noble to believe that Walker represented the Computer Group, the most successful gambling ring in the city, the gambling ring in which Dr. Mindlin was an admitted member. The alarm in Noble's head was now whistling like a steaming tea kettle.
Noble respectfully informed his superiors that he believed he had discovered one of the largest illegal bookmaking operations in the nation.
The distinction between bookmakers and mere bettors is an important one. Though federal prosecution of illegal bookmakers declined in the 1980s. the government still enjoys good legal footing in such cases, because it can easily be proved that bookmakers are in the business of illegal gambling. It is much more difficult to prosecute the mere bettor, because the laws weren't clearly written to apprehend him. In a 1981 case in Rhode lsland (U.S. v. Robert Barborian and Anthony Lauro), the U.S. District Court ruled that the use of telephones or other wire communication for interstate gambling "does not cover an individual bettor, even if the bettor wagered substantial sums and displayed sophistication of an expert in his knowledge of odds making."
But special agent Noble was certain that he was chasing bookmakers. More agents were assigned to aid Thomas Noble. Surveillance was increased. Wire taps were approved in December 1964. Every day was a new adventure. Two years with the bureau and he was about to crumble the LCN's finest bookmaking ring with one squeeze of his fist. Had it all started so quickly for J. Edgar Hoover?
"Through legally intercepted conversations," wrote Noble, forcing himself to sit at his desk long enough to compose this sworn affidavit in January 1985 while bookmakers were making book outside, "this investigation has determined that Ivan Mindlin directs William Thurman Walters on the placing of what are believed to be layoff' bets for the Computer' group. Walters operates a large bookmaking operation which be uses to place bets on desired games..."
This allegation was the keystone of special agent Noble's investigation. Layoff bets, by definition, are made exclusively by bookmakers wishing to protect themselves against large losses by making bets with other bookmakers.
"Besides this operation," Noble continued, "Walters controls a bookmaking operation under the guise of C&B Collection Agency. This second bookmaking operation is run by Glen Andrews Walker who uses the premises and facilities of C&B Collection Agency as a bookmaker's wire room...
The big day was January 19, 1985, the eve of Super Bowl XIX, in which San Francisco would crush Miami, 38-16. The weekend would prove to be even more momentous for special agent Thomas Noble. He had requested 43 separate raids to take place in 23 cities in 16 states - perhaps the largest series of coordinated gambling raids in history. "Historically," wrote Noble in requesting the raids, "(during) the weekend wherein the National Football League holds its Super Bowl' championship, the betting volume for bookmakers is very high."
He was right on. The members of the Computer Group were caught redhanded. Betting ledgers and hundreds of thousands of incriminating dollars were seized. All that remained before Thomas B. Noble could ascend toward the top of the FBI like a rocket toward the stars was this matter of legal paperwork. He simply had to prove that the Computer Group was an illegal bookmaking operation, that it was in fact a strong arm of the LCN.
"He said that to me once," recalls Billy Walters. "Noble said to me 'We're closing in on your friends in La Cosa Nostra.' I'm telling you, the guy's read too many comic books.'"
Michael Kent and his brother, Bill, had been invited to spend the Super Bowl weekend at the home of Dr. Mindlin in Vail. Colorado. Before he left Las Vegas, Michael Kent was asked to run a couple of errands for Mindlin. First, he received cash and checks from Billy Nelson, the gambler who had originally brought Kent and Mindlin together and who now served as an aide to Billy Walters in the Computer Group. Next Kent visited the cashier's cage at the Horseshoe Casino, where he showed the cashier a dollar bill scrawled with a series of handwritten numbers, a password of sorts. The cashier handed Kent cash from the account of Billy Walters. That week Michael Kent carried some $500,000 in cashier's checks and perhaps $100.000 cash to Vail, for delivery to Dr. Mindlin.
Kent says his brother Bill happened to be sitting on the doorstep of Mindlin's home in Vail on Saturday, Jan. 19. when he was approached by three men identifying themselves as FBI agents. "One guy tried to kick the door in," Michael Kent says. "Bill said. What did you do that for?' The door was unlocked. Bill reached over and opened it."
The FBI took down the names and addresses of the Kent brothers, and then Michael Kent sat and watched television while the FBI rummaged through the house, confiscating money, records and gambling paraphernalia. An FBI agent was careful not so obstruct Kent's view while he was watching television. "I thought that was rather polite," Kent says. "They let us come and go as we pleased. I remember we went out for lunch - Ivan too. Ivan seemed to be taking it very well. He didn't seem to be too overly concerned." Indeed, the doctor simply turned around and began his own investigation of the FBI. Sources say that Mindlin, in his uniquely audacious manner, hired a private investigator to follow special agent Noble.
But Michael Kent wasn't taking it very well at all. He had been detained by police only once before, he says. for driving with a loud muffler. "It's a bad crime in Goldsberg, Pennsylvania," he explained in a deposition. The night of
the Vail raid he would return to Las Vegas so find she FBI raiding his condominium as well as the homes of his partners. Vacationing in Florida, Billy Walters and Billy Nelson were also raided that day. Clearly they were all in some sort of trouble. He says it struck him then how very little he knew about the group he had created.
One year earlier, special agent Thomas Noble had contacted Michael Kent about the check that had been endorsed by Dominic Spinale. At that time Kent had listened to Dr. Mindlin, who advised him not so worry. But, this matter of FBI raids was much more serious. At the advice of special agent Noble, Kent says he hired his own lawyer, separate from Mindlin. Kent was referred to attorney Steven Brooks in Boston. As Brooks learned more about she gambling operation, he urged Kent to take precautions that would protect him from Mindlin. "I would tell Ivan that I wanted to do things differently on the advice of my lawyer," Kent says. "Ivan would say, Oh, don't listen to him. What does he know? He's a schmuck.'"
Kent says he finally came so understand Mindlin's priorities. But Kent's attorney believes his client might still be loyal to Dr. Mindlin to this day, if not for the FBI's frightening raids five years ago. "Remember, Michael thought everything was fine back then." Brooks says. "He had no idea that he should suspect Mindlin of anything."
Dale Conway says he was sitting as his desk, placing a bet over the phone from his Salt Lake home, when he stood to answer a knock at the door. In his driveway he could see a postal service truck. Conway opened the door to receive his mail and a man shouted, "FBI!" Suddenly, he claims, several G-Men came surging into his living room.
"They ran upstairs so where my boy David was playing in his room, Conway remembers. "He was just 12 years old. He's sitting on the floor playing. They knocked on the door and I guess he didn't answer quick enough, because they just busted the door down. The door's still all busted. I just left it like it was."
FBI records show that Dale Conway's telephones had been wiretapped prior to the Jan. 19, 1985 raid of his home. He says he had been making bets of $1,000 and less for Billy Walters, whom he met at a poker tournament in Las Vegas. "I don't see what's the big deal about betting on a ballgame," says Conway, 61, who has since been indicted for his part in the Computer Group.
The government seemed to believe that Dale Conway was much more than a simple gambler. In fact, Las Vegas Strike Force attorney Eric Johnson - who was acting as lead prosecutor in the case - flew to Salt Lake in May 1985 to plead that the government be allowed to retain as evidence $75,179 in cash seized in the January raid of Dale Conway. Johnson noted that Conway's money had been hidden in coat pockets and inside a box tied so a rope behind the furnace wall. "I don't think this is normal operating procedure for individuals who are trying to use their money in a legal manner," Johnson told the judge.
Johnson also said, "This is not your typical bookmaking operation, your Honor." And he said: "You're talking about over a thousand hours of tapes that have to be listened too. You're talking 216,000 pages of computer printouts that have to be reviewed." And he said: "We believe that bookmakers from coast to coast in a number of states have been involved in this. It's set up like a corporation. If your Honor would like, I can even show a chart demonstrating the vast complexity of this case."
The judge declined to view the chart. Is was obvious that the strength of Eric Johnson's argument that day - and the strength of the case itself - was that the government was going to expose and arrest a national network of illegal bookmakers. Too many times to count, Eric Johnson referred to Dale Conway as a bookmaker. He said Conway was just one of the many bookmakers involved in this investigation. He made it sound as though, once the government had learned so make sense of all she information is had seized, it would become easier to apprehend and bring to justice all future bookmakers.
"This case is complex and mammoth in proportions," Johnson told U.S. District Judge Bruce S. Jenkins in Salt Lake that day.
The judge asked many questions, and listened to Eric Johnson's answers, and then he ordered that the $75,179 be returned, along with stock certificates and other seized monies. Five years later, Dale Conway wonders when the rest of his "bookmaking evidence" will be restored so him. "They even took my 12-year-old's Dungeons & Dragons game," says Conway, "I guess because there's dice in that game, they called its gambling device.'"
When this matter is settled, he'd appreciate it if someone from the FBI would come by to fix the door.
Some new bookies were in town, and they wanted to meet Billy Walters. So he came to the Desert Inn for lunch. The year was 1984. Waiting for him at the Desert Inn were Walters' top associate, Glen Walker, and a common gambler known in town as Matius (Fat Matt) Marcus. There were also two other men whom Walters had never seen before. They introduced themselves as Danny Donnigan and John Cleary, though Glen Walker still wonders if those were real names. "I remember Danny Donnigan sitting there in his Brooks Brothers sweater," Walker says. "It didn't seem right. These guys just didn't fit in."
The two men turned their attentions to the kingpin Billy Walters, asking him many questions as they buttered their bread. Which is the most efficient method so establish a betting line? How does a fellow handle layoff bets? Basically they wanted Billy Walters to tell them how to become bookmaker.
Walters says he began by saying:
"I'm not a bookmaker, but..." He gave them advice and drew them into further conversation, which is how he generally handles his suspicions. Later he asked to speak with Walker privately. Says Billy Walters: "I told Walker, I said. These guys aren't bookmakers. They don't know what they're talking about.' I told Walker I would have nothing so do with it."
In the parking lot Billy Walters says he found a Lincoln Mark IV with Louisiana plates. The two men had mentioned that they'd recently moved from Louisiana. Walters wrote down the license number and passed it onto a private detective. "Of course he couldn't trace it anywhere," Walters says. "So that was it for me. I had no association wish them whatsoever."
But Glen Walker could only envision pigeons and soft point spreads, easy money. He bet with the new bookmakers, and he was not the only one. Fat Mat and his preppy bookies were quickly able to establish business all over town. For all of their dumb innocence, they were very sure of themselves. Fat Matt could be found hanging out (literally) at Gary Austin's sports book on the strip, passing out business cards. He was so brazen that, had the thought had occurred to him, he might have placed an ad in the newspaper: "Fall Malt's Illegal Bookmakers! We Take Bets From Anyone!" Indeed, he and his partners showed no fear of the law whatsoever.
It is amusing now to imagine the strategy sessions held at FBI headquarters in Las Vegas in January 1985, after 11 phone conversations between Glen Walker and the Marcus Sports Service had been intercepted. Special agent Thomas Noble sprang into action! He assigned other agents to investigate the illegal bookmaking operation; intelligence filtered in. The Marcus' group had swelled into one of the largest illegal bookmaking operations in the country, grossing as much as $2 million a week in bets. Their clients included associates of New York Mafia boss "Fat Tony" Salerno, and Chicago racketeer Tony Spilotro, who was betting them for upwards of $50,000 per week. But Noble's chief interest in Matt Marcus was his association with the Computer Group.
"Intercepted conversations indicate that the Waiters-Walker bookmaking ring operation uses this [Marcus] bookmaking operation on a regular basis to place what are believed to be layoff bets in violation of Title 18. United States Code. Sections 1955, 162(c) and 1952(d)," wrote Noble in the FBI affidavit, before his men went after Matt Marcus and tried to shut him down.
And so, on Jan. 19, 1985, on the eve of the Super Bowl, several FBI rents raided the Marcus Sports service. Perhaps they even broke down some doors. Certainly their firearms were loaded and ready. They raided the illegal bookmakers like they had never been raided before. Meanwhile, the men who worked with Matt Marcus sat in chairs and crossed their legs, perhaps smirking to each other from time to time.
Undaunted by the FBI, the Marcus Spans Service continued to accept bets for several months more. Then one day a pair of angry bettors marched into the office and demanded money they thought they had coming. They might as well have tried to get a refund from, say. the Internal Revenue Service. In other words. they did not come away with their money. Nonetheless, they had guns. Real guns, loaded with real bullets. The men behind the Marcus Sports Service were scared almost to death. They closed down their office shortly thereafter and went back to the Foley Federal Building at 300 Las Vegas Blvd., where they resumed their normal duties as agents for, yes, the Internal Revenue Service. The Brooks Brothers colleagues of Fat Matt Marcus had been nothing more than governmental meter maids. The Marcus Sports Service was their brilliant "sting" operation, with which the IRS had hoped to catch Billy Walters and other gamblers.
It seems now that the IRS probably should have shared its plans with the FBI. Perhaps then this peculiar business of the FBI raiding the IRS could have been avoided. "We knew upfront about that," special agent Noble says today. "We knew what it was. If you look carefully at the warrants, you'll see that we knew. We don't operate in a vacuum."
The FBI now says that it went forward with the raid in order to give the IRS bookmaking operation more credibility in the streets. In layman's terms, one government agency raided another government agency in order to convince the criminals that the other government agency was not in fact a government agency, but was rather an illegal operation that happened to be run like a government agency.
When the Las Vegas Sun broke news of the IRS scheme, more than four years after its demise, Nevada's U.S. Senators, Harry Reid and Richard Bryan, asked to see the records and reports of the undercover bookmakers, to learn what good had come from the sting. In his reply. IRS Commissioner Frederick Goldberg informed the senators that the records of Project Layoff, as it was named, were no longer available. They had been "disposed of." Destroyed would have been a stronger term, and just as accurate. Goldberg was able to inform the senators that the project had operated at a loss of $577,770, which in 1985 amounted to the federal income taxes paid by 350 average Americans.
Among the losses were $75,000 in uncollected gambling debts. The rumor in Las Vegas is that these were accrued by the notorious Tony Spilotro who - as it turned out was simply continuing his career of stiffing the IRS. A few months later, Spilotro was found buried in an Indiana cornfield, although no one believes the IRS would have anything to do with that - at least not as long as Tony was in red to the government for $75,000
The IRS is facing two Congressional investigations, and its Nevada office has been shaken up severely. But it's not as if the 1R5 is going to have to go through a terrible punishment, like, say, an audit. "The IRS owed me something like $10,000 when I was done betting them," Glen Walker says sadly. "I asked if I could get it written off of my taxes."
Billy Walters moved to Las Vegas eight years ago with his family and his immense ego and very little else. He was worth more dead than alive, as they say. For too many years he had been operating a used-car dealership in his home state of Kentucky, and then gambling away the profits. In 1982 he plea-bargained to a misdemeanor bookmaking charge - possession of gambling records, it was called - and was sentenced to six month probation and a $1,000 fine. He was in debt to several bookmakers, and he could not command credit. At 35, into his third marriage, with an ill son who was supposed to have died years before, Billy Walters believed he had no alternative but move to Las Vegas, to be a full-time professional gambler, to lay all that he had on this one final hand.
Walters can pinpoint his problems from those days, now that he is worth millions of dollars. As recently as 1982, when he was preparing to leave Kentucky, he had lacked focus. He was a gambler, that was definite, but he had no idea how to gamble professionally. He wanted to win every single day. When he lost at the race track or when he lost betting games or when he lost playing poker or when he lost playing golf, he always felt compelled to get down another bet, to retrieve what he had lost that very day. He recalls an evening in Kentucky when he was pitching nickels with a friend. The wagers grew until Billy Walters had lost his house - his house, from pitching nickels.
Then he had to come home and tell his wife. "I'm not one to beat around the bush," he says. Standing now in his kitchen, head down, hands in pockets, he seems to be recreating the scene. "I just came home and said to her, Look, honey, I was pitching nickels with a guy today, and I lost the house. And we might have to move.'" They didn't have to move but it took Billy Walters a year and a half to pay off the mortgage incurred by the revolution of the five-cent coin. He kept the house, but he lost his wife. She left him. That was his second wife. "She couldn't take it. Fifteen times I've come home where I've lost every single penny we've got," he says, as if revealing a scar.
His father died when William Thurman Walters was not yet 2 years old, and his mother ran off, and his grandmother, who was a maid in Mufferville, Ky., left him under the supervision of his uncle each day. His uncle ran a pool hall. Billy Walters estimates that his first bet was made at the age of 5, when his uncle would assemble islands of Coke cases around a pool table so that the boy could reach the felt. As soon as he began to work, his grandmother charged him rent. He hustled pool, betting his rent money. He was not yet a teenager.
At 13 he moved back in with his mother, in Louisville. At 16 he had fathered a child and married the mother. Some morning he worked 4:30 till 7:30 at a bakery, some nights it was 3 to 11 at a gas station. Most days he went to school. Sometimes he ran a poker game - he was still just a teenager - in a house adjacent to Billy's Lounge. That marriage lasted one year. It's been much longer than a decade since he's seen his daughter.
His occupations have included newspaper boy, farmhand, shoe-shiner, baker, tobacco worker, foundry worker, painter, car dealer, realtor. To him, these were mere side jobs. In his mind he was a professional player - of pool, gin rummy, poker, blackjack, roulette, golf, the horses, whatever. He remarried and with his second wife had two sons, which has since led Billy Walters to decide that his own childhood was not so desperate. His oldest son, Scott, should have been dead at the age of 5.
"They said he had 30 days to live," Billy Walters says. "He had the tumor back behind the left eye, where they couldn't operate. After radiation they told us every day he was going to die. I stayed drunk the whole time. I was 26 at the time. It was the only thing in my life I wasn't able to handle. I neglected my business and my family and stayed drunk. After nine months I went back to running the business."
The business, he says, was a wholesale auto dealership in Louisville. "I earned $400,000 or $500,000 a year," says Walters, "but I never accumulated one dollar." Three years after his son had been diagnosed, Billy Walters was wed to his current wife, Susan, and she has been a wonderful partner. They will celebrate their 14th anniversary in September. She moved with him to Las Vegas in 1982 and served as his accountant when he began to move money for the Computer Group. She was indicted with him in January 1990 and expected to go to trial with him in November 1990, if the case got that far.
Walters says he went to work for Dr. Ivan Mindlin in 1983, making bets in Las Vegas and a few other territories. By then the Computer Group was four years old and churning out millions in profits each season. In return for his work, Walters received free use of the group's betting information. Because he didn't have to share his profits with others, he might have been earning more from the Computer Group than Michael Kent, the computer wizard who so naively trusted Dr. Mindlin.
For the first time in his life, Billy Walters was winning consistently and holding onto the money. He invested in real estate, fast food franchises and other ventures. His confidence was such that he could play golf matched for thousands of dollars. He even captured the 1986 Super Bowl of Poker in Lake Tahoe. There has been recent talk that he won more than $3 million in one day of roulette in Atlantic City. Apparently, Walters hired agents to take notes at the roulette tables, in attempt to locate "biases," or patterns, in the wheels. Sources at Caesars Palace say that after Walters beat them for more than $1 million in one sitting, the wheel was sent to NASA for an examination and dissection that revealed specific biases - but no for the numbers Walters had been playing. Nobody knows his secret, and he isn't saying, though he admits he has been barred from playing roulette in the major casinos.
Late in 1984, Walters' reputation had risen so high that he was invited to join the Computer Group on a percentage basis. In other words, he would share in profits with Michael Kent, Dr. Mindlin and other core members of the group. Walters continued to place additional bets for himself until January 1985, when the FBI raided the group of its records and cash, shutting down Walters for the remainder of the college basketball season. He complains about harassment by the FBI, saying it confiscated funds and refused to transfer them to the IRS to pay his taxes. He claims he is persecuted in part because the government loathes his attorney, Oscar Goodman, a colorful Las Vegas lawyer who has represented many mob figures.
"You've got to understand my position," he says. "After the government went through all the evidence, they decided not to prosecute us. For three years they tell us the case is dead. Then all of a sudden, two weeks before the statute of limitations is going to run out, they come back with these indictments. The day before we were indicted, my attorney (Goodman) tried to contact the Strike Force to say we would be willing to turn ourselves in. The Strike Force wouldn't return his calls. The next day they come barging into my house, drag me out of bed, put my wife in leg irons. I'm telling you, you don't believe it until you've gone through something like this, what the government can do to you."
Walters says he agreed to give this, his first interview, out of a feeling of desperation. He perceives himself to be a rare gambling success story - a man who was in debt before he came to Las Vegas. At 43, he wonders why he isn't put forth as a role model. "People look at us gamblers and say, You don't have a job like we do, you don't work 9 to 5, you have to be doing something wrong," he says. "I came to Las Vegas because it's the Wall Street of gambling. If you can get arrested for betting games here...well, let me just say I never would have dreamed that the things that have happened to me, with the FBI and the rest of it, could happen here."
Then he admits that his life could be much worse. Inviting a reporter upstairs, he visits with his son, Scott, 22, is no bigger than a 14-year-old, and outside the house he wears a cap or wig to cover the hair loss caused by his cancer treatments. He recently got his first job, as a busboy at the Horseshoe casino downtown. His father says he could be no prouder of his son. In this relationship the gambler is called "sir."
"Let's see those autographed baseballs of yours," Billy Walters says, and the two of them sit on the bed, reading the signatures of Scott's heroes.
At one time Irwin Molasky was vice president of Lorimar-Telepictures, which produced television shows ranging from "Dallas" to "The Waltons." Today, surrounded by his vast real estate holdings, he settles for being one of the most powerful men in Las Vegas. There he lives atop the Regency Towers, which stands like a castle overlooking Irwin Molasky's kingdom. At one time the Regency Towers was known as a high palace for the mob. Irwin Molasky would surely argue that this no longer is the case. Indeed, he commenced another debate over a piece of real estate in 1975, when the subject was his California resort Rancho La Costa. At that time, Penthouse magazine reported the La Costa was controlled by "mobsters," that it served as their "power center," and that it used "illegal profits" from "the mob's worldwide operations."
Molasky and his co-owner at La Costa, Merv Adelson, who at one time was chairman and chief executive at Lorimar, did not appreciate such unsavory allegations. So, they filed a $490 million libel suit against the magazine. The legal proceedings were drawn out over 10 years at a cost of $25 million, until Molasky and Aelson finally settle for an apology. A major booster of UNLV basketball, Molasky at 62 is highly image-conscious. It is important that he be recognized as a sober and legitimate businessman. And in fact, Molasky has never bee charged with a crime.
Molasky's attorney, Stanley Hunterton, readily admits that his client enjoys betting on ballgames, as do thousands of his fellow residents Las Vegas, where is can be a legal and rather social activity. However, Dr. Ivan Mindlin was not interested in currying favor with thousands of legal bettors. He was interested mainly in Irwin Molasky.
For years, Dr. Mindlin had been pretending to be the brains behind the Computer Group, claiming to be the inventor of its unbeatable program for forecasting ballgames. It appears that Dr. Mindlin was never much more than an intermediary for the group, as his own attorney admits today. But Mindlin surely knew how to maximize his position. By sharing the group's betting information with Irwin Molasky, and making a winner out of Irwin Molasky, he became a friend of Irwin Molasky. When Dr. Mindlin needed help in the commodities business, who did he look to? Irwin Molasky, with whom he became partners in the purchase and sale of commodities, according to attorney Stan Hunterton.
Michael Kent, the mathematician who established the Computer Group's forecasts, recalls hearing Dr. Mindlin speak of Molasky in 1983-84. "From what I remember," says Kent, "let's say it was a situation where we had taken a team with 4 points. Well, for some reason that day, the team we took had jumped up to 5 points - which almost never happened. Usually when we took a team, the points went in our direction."
"I remember saying, Shoot, it's too bad we didn't wait and get that team at 5.' And Mindlin said to me, Don't worry - I'll go ahead and give the 4 to Molasky, and we'll go up and take the 5.'"
That day they sold their bets on the underdog at 4 points to Molasky. "It was a good deal for us," says Kent. "Molasky didn't know any better, so he wouldn't mind taking the 4 . And we were able to use the money to bet on the 5, which was a better bet."
As the Computer Group investigation lay dormant from 1986-88, Molasky and everyone else using the group's information appeared safe from prosecution. Then, in 1988, the government began to resurrect its case. Molasky hired Hunterton, who says he had served as a special attorney within the Organized Crime Strike Forces for 10 years, until 1984. Hunterton acknowledges that he was involved in the early stages of the government's case against the Computer Group, approving requests made by FBI special agent Thomas Noble. But Hunterton denies the assertion, made by others in the group, that representing Molasky was a conflict of interest.
Using his contacts - which the attorney admits were the reason Molasky hired him - Hunterton reportedly was able to win immunity for Molasky, in return for his testimony before the grand jury. However, Molasky's testimony seems to have been a mere formality. "I've seen the (Computer Group) indictment," said Molaksy's longtime attorney Sam Lionel, who worked with Hunterton on this case, "and it doesn't appear that anything he testified to had anything to do with what is contained in the indictment." Whatever the substance of his testimony might have been, his appearance before the grand jury ensured that he would be excluded from any indictment the panel might hand down.
Irwin Molasky's record as a law-abiding citizen was thus preserved, and his good name has been spared. However, some of the indicted members of the Computer Group think he may not be entirely finished with this business - not yet, anyway. If their case goes to trial in November, as scheduled, they plan to subpoena Molasky and question him vigorously, not only about his betting with Ivan Mindlin, but also regarding his attorney, Stanley Hunterton, who played both sides as effectively as anyone in the Computer Group ever had.
After he had been raided by the FBI in January 1985, Michael Kent began to ask the kinds of questions he should have been raising long ago. So began the end of the Computer Group. He wanted to know how the group was run, and what became of his information after he gave it to Dr. Mindlin, and how much money his program actually was generating. His partners in the computer group informed Kent that his precious information was being shared with the outside world in ways that could only profit Mindlin. Here was Michael Kent, the mastermind, still living in his humdrum condo in Las Vegas, while Mindlin had homes in Vegas, Colorado and California.
Dr. Mindlin even seemed to profit from the FBI's raids. Kent alleges that when the raids shut down the group's activities six weeks into the 1984-85 college basketball season, Mindlin claimed the group had simply broken even on its bets to that point. Therefore, no profits would be paid to any members of the group. But when the FBI allowed Kent and others to review the seized records, Kent says he discovered that his group had earned a total of $1.6 million in those six weeks of basketball.
By 1986 Kent had hired a lawyer of his own, Steven Brooks of Boston, who advised him that many of his current practices with Dr. Mindlin were either illegal (such as Kent's failure to pay taxes) or inexplicable (his failure to oversee Mindlin's handling of the money). Kent says he tried to change the way he conducted business with Mindlin, but had little success.
Wary that he could not account for the actions of his partner, Michael Kent nonetheless kept trying to deal with Mindlin. He says he offered Mindlin exclusive rights to the computer forecasts for the 1987 college football season at a fee of $700,000. In return, Kent would tell Mindlin which teams to play and how much to bet, and Mindlin could keep all profits. However, Kent says, the forecasts lost money for Mindlin in the first week, at which point he canceled their agreement. Kent says he never received payment for his one week of service, which he valued at $35,650.
At this point Michael Kent was at the end of his rope. He had placed all of his trust in Dr. Mindlin. In return Mindlin had seemed to treat him like a son. The truth of their relationship, Kent now believed, was that he had been playing the fool to Mindlin for all these years.
In 1988 Michael and his brother John Kent filed a joint suit against Ivan Mindlin, demanding $589,719 in Computer Group profits and payment for services. They suspect that he owes them more, but in all likelihood they will never be able to prove it. At the same time, Michael Kent went tot he FBI, admittedly to punish Mindlin. Kent agreed to explain what he knew about the Computer Group and turn over evidence. In exchange, he was granted immunity from prosecution.
Dr. Mindlin's attorney, Morris Goldings, was also representing Michael Kent when the FBI began its investigation in 1984. Today he accuses Kent of extortion. "Kent has admitted under oath that he told Dr. Mindlin, If you don't pay me the money you owe me, then I'm going to the feds with you.' That's the kind of guy Michael Kent is."
Indeed, Kent's lawsuit revived the government's interest in its dormant case against the Computer Group. "I don't blame Mike Kent at all for turning over to the government," Billy Walters says. "This was the only way he knew of to get even...Kent is a bright guy in mathematics. He knows numbers like nobody else. But he's absolutely dumb from a common-sense standpoint. Mindlin would tell Kent that he was betting, say, $5,000 when he was really betting $20,000. And Kent had no idea."
Yet Billy Walters admits that he too was fooled by Mindlin. Walters says he quit the group in the spring of 1986 when Mindlin refused to honor a $110,000 debt. "I knew from day one who I was dealing with, but never for a moment did I think the guy could steal money from me," Walters says. "I thought I was too important to the operation. I was the guy who moved the money."
By 1987, the Computer Group was dead, victim of a human virus. Vanity and greed had infected its affairs. The computer wizard, Michael Kent, was refusing to supply his information, and the gambler, Billy Walters, was refusing to move the money. Yet Dr. Mindlin was still in business. He hired Kent's friend, Mark Ricci, of all people, who in the 1970's had worked with Kent at Westinghouse. Mindlin's new group had its run of modest success, but it could not begin to compare with the impact he had made with the Computer Group. Indeed, the doctor was something of a tragic figure, broken by his own greed, devastated personally as well as professionally. While trying to recoup his relationship with Michael Kent, the doctor had engaged in a worldwide, yearlong search to find a cure for his only son, Gary Mindlin. In the end, he succumbed to a cancerous brain tumor, the same type from his Billy Walters's son had been so miraculously spared. The another tragedy struck the Mindlin household. In 1988, the doctor's wife, Georgia Mindlin, died from respiratory failure consistent with an allergic reaction. The coroner found that she was probably allergic to penicillin - penicillin that she apparently received from her husband, the doctor.
The autopsy report indicated that Georgia Mindlin, 56, was suffering from a sore throat on March 19, 1988. Dr. Mindlin admitted to giving her 500 to 1000 milligrams of penicillin, which she took orally, after her evening meal.
Some 25 minutes later she told her husband that she wasn't feeling well. She got out of bed and collapsed, falling into cardiorespiratory arrest. The doctor called for an ambulance. The police arrived at 11:52 p.m. to find an emergency crew trying to save Georgia Mindlin. Police say that Dr. Mindlin attempted to revive his wife with a shot of adrenaline after her airway had closed off in reaction to the penicillin. "It's easily reversible with things like adrenaline if it happens before the airway closes," says Eagle County coroner Donna Meineke, who requested the autopsy of Georgia Mindlin. "But it (the injection) has to happen in minutes. Once the airway closes off, oxygen can't get to the brain."
Vail police lieutenant Corey Schmidt says he conducted his investigation of Georgia Mindlin's death without interviewing her husband. "I think he left town," says Schmidt, who declines to make his report public. "I didn't have a lot to go on, other than friends' and relatives' hunches that it (her death) was purposeful, but we couldn't nail it down."
Special agent Thomas Noble says that the FBI is looking into the death of Georgia Mindlin. "Once you read the coroner's report, it will be clear why we have an interest," he says. When Michael Kent was deposed last year for his lawsuit against Mindlin, the doctor's attorney questioned him repeatedly about the death of Georgia Mindlin. Kent admitted that the FBI had indeed asked him about it, but said he'd known little of her death - as little as he had known about Dr. Mindlin's betting activities with the Computer Group.
Lt. Schmidt is surprised to hear of the FBI's interest in Georgia Mindlin, considering that the Bureau never asked him for his report. "If they're doing something, why wouldn't they have contacted me?" he wonders.
As for his own probe, Schmidt says he found nothing more than the hunches of relatives to make him suspect foul play. He declares the investigation inactive. "We haven't had one since 1979," he says, referring to murder in Vail. "Not that we've been able to prove, anyway."
His former colleagues say that Ivan Mindlin still has not given up. They say he works with a beard in Miami, using the same program Michael Kent developed 10 years ago.
Kent himself would be the first to warn his successors that the business is no longer so easy. Kent has formed a legal sports betting corporation with two partners - his brother John Kent and their friend, Mark Ricci, who stopped working for Mindlin in 1988. Their attorney, Steven Brooks, boasts that all profits of MJM Inc. (it stands for Michael, John, Mark) are reported to the IRS and that all bets are placed in full harmony with the law. In a recent deposition, Ricci estimated that their three-man betting group won $800,000 last year, which would have represented two good weeks for the Computer Group.
When Michael Kent was a mere centerfielder, trying to decipher the strengths and weaknesses of his softball team at Westinghouse 18 years ago, there was no real computer science in sport. Kent was at the leading edge of all that. Today every statistic is calibrated, measured. Every human decision can be backed by numbers. Michael Kent was among the first to find reason within the numbers.
In November, if all goes as planned - and there is nothing in the history of this case to suggest that it will - his partners will be reunited in the courtroom once more (Kent himself was granted immunity.) Though Assistant U.S. Attorney Eric Johnson was the lead prosecutor in the government's investigation of the Computer Group five years ago, and though his name is listed atop the Jan. 4 indictment, he will not be in charge of the case when it comes to trial. At that critical point, the six-year case will be handled by Jane Hawkins, even though she has been an Assistant U.S. Attorney for less than two years. As a matter of fact, when Eric Johnson was leading the Computer Group investigation in 1985, Jane Hawkins was a humble clerk for Judge Lloyd D. George, before whom - and a fine coincidence this is - she will be trying the case.
"That may have been the smartest thing Eric has ever done, getting himself away from this thing," admits FBI special agent Thomas Noble.
Abandoned now by all the others who have worked on this case, Noble seems to be hanging out to dry. He works for the FBI out of Chicago these days, his reputation stained. For six quixotic years he led the chase after the Computer Group in the belief that it was the largest bookmaking operation in the country. Following Noble's lead, the FBI obtained wiretaps on the group's telephones for five months, until there existed more than 1,500 hours of taped conversation, which then had to be laboriously reviewed and transcribed. He requested and was granted the aid of special agents to follow the group's actions all over the nation. He provided information that resulted in raids of 45 homes or offices in 16 states. He requested a raid of the Internal Revenue Service. (But he knew what he was doing!) He oversaw the seizure of evidence by the truckload: bank checks, the origins of which had to be traced, hundreds of thousands of dollars with serial numbers that demanded verification, gambling ledgers that had to be interpreted, not to mention 216,000 pages of computer printouts, incomprehensible to all but Michael Kent. There were 89 boxes of evidence in government storage, much of it still there today. Then there was the matter of dealing with this vast array of people. Every man and woman raided had a lawyer demanding appeasement. The government sent Eric Johnson and other attorneys to various sites, defending the FBI's right to retain evidence, including large amounts of cash. It is no easy thing to capture a group of criminals these days.
Thomas Noble still maintains his firm belief that the Computer Group was a criminal enterprise worthy of prosecution. But at what cost? If a bill could be brought before the taxpayers, the price of this investigation might total $1 million, which does not include the $577,770 lost by the IRS in its parallel attempt to capture the group.
Then, in January, after six years of investigation and review, after the case had been opened and shut and opened again, the indictments at long last came down in Las Vegas. Nineteen men and women were placed under arrest. Each was charged with up to 120 counts of conspiracy, gambling and racketeering, related to their obvious use of the telephone to place bets and exchange betting information across state lines.
There was no charge of bookmaking.
So the government admits, at last, that the Computer Group simply was betting on games. If not for Ivan Mindlin's careless association with a petty hoodlum, there might never have been a FBI inquiry. But the inquiry began, and it was extended into the next decade by innuendo and intrigue, and by Thomas Noble's desire to understand how these people were earning so much money.
Six years with Big Brother has not cured the Computer Group of its addiction to gambling. Of the 19 who were indicted in January, most are still gamblers. Like deposed heads of state, they await trial while the system grinds on without them. In Las Vegas, all the top betting operations now have access to their own Michael Kents. They hire their Billy Walters to move the money on a national level. Aided by their Glen Walkers and Dale Conways and Arnie Haaheims, they flood the market and try to manipulate the line. In all of the Vegas sports books there are agents for the betting combines, soldiers armed with cellular phones and beepers, waiting for instructions. For all their vast organization, these modern brokers of sports bets will never match the sensation created by their forefathers, who, not 10 years ago, were sophisticated enough to beat the linemakers at their own game.
Their legacy was to ruin the game for all who might try to duplicate their success, including themselves.
"Next year," says Michael Roxborough, an official linemaker in Las Vegas, "we've got a new computer program that's going to help us make a better line."
The following information was drawn from two sources:
(1) the betting ledgers of Dr. Ivan Mindlin, seized by the FBI on January 18, 1985;
(2) a chart compiled by Michael Kent, using the seized ledgers and other records of his own. Both sources hove been identified as exhibits in Kent's civil suit against Mindlin. It should be pointed out that these figures account for the activity of the main Computer Group, and thus represent only a fraction of the total profits earned by Michael Kent's computer forecasts.
Year Credit Line Amount Bet Profits Betting/Profit ROI
'80-'81 $370,000 $5,280,000 $700,000 $7.54 13.3%
'81-'82 $920,000 $20,900,000 $3,400,000 $6.15 16.3%
'82-'83 $1.790.000 $29,640,000 $3.721.000 $7.97 12.6%
'83-'84 $2,230,000 $141,830,000 $4,810,000 $8.70 11.5%
'84-'85 $3,590.000 $37,410,000 $1,298,000 $28.82 3.5%
TOTAL: $8,900,000 $135,060,600 $13,929,000 $9.70 10.3%
*Betting/Profit = the amount wagered in order to profit $1
The Best of Times, The Worse of Times
The Computer Group reached the height of its powers in 1983-85. The national betting network was operating at its peck of efficiency, which freed Michael Kent to further fine-tune his computer program. The 1983 seasons represented the lost windfall year for the Computer Group, which had enjoyed a great run of three years against betting lines created by the inexperienced linesmakers in Los Vegas. By 1984-'85, the linesmakers were beginning to improve appreciably, as were other bettors competing in the market against the Computer Group.
THEIR BEST WEEK
The 1983 college football campaign was the best season the Computer Group ever had. Though the group began the season with a relatively low credit line of $1.1 million, it placed $23,440,000 in bets and won $3,850.000. It was only fitting that the group capped its best season with its best week ever, the last week of the 1983 season, which included the New Year's Day bowl games. It tamed out that Michael Kents's computer program was at its best in the post season. While other handicappers had trouble rating the rare match-ups found in bowl games, the computer was as efficient as ever.
Amount bet Wins Losses Ties Net Profit % of Games Won
$2,907,300 $1,977,000 $912,000 $18,100 $974,000 68.4%
In order to earn $1 that week, they bet (2.99. The return on their investment that week was 33.5%
THEIR WORST WEEK
The following football season was the worst in the group's five years of betting on college sports. Laying $21,240,000 in bets, the group finished the season with heavy losses in 7 of its lost 9 weeks, including Week No. 7 below, which happened to be its worst week on record. Facing a deficit o1 $545,000 in the final week, the Computer Group won 85% of its wagers on bowl games, netting $628,900 and rescuing its members from red ink. The group finished with a small profit of $83,670, but a profit nonetheless.
Amount bet Wins Losses Ties Net Profit % of Games Won
$2,184,700 $655,800 $1,133,400 $395,500 $(590,940) 36.7%