11/01/2002 1:00AM

Prosecutors finally run out of chances to convict gambler

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If you have ever channel surfed late at night, you might have come across a show called "American Justice with Bill Kurtis." There, Kurtis examines American judicial cases, some good, some bad, but all interesting.

In Las Vegas, the case of professional gambler and businessman Billy Walters would make for a great show on "American Justice."

Last week, District Judge Mark Gibson ruled that prosecutors had erred again in the Walters case and dismissed the money-laundering charge against him and three associates. This was not the third strike against prosecutors in the Walters case, it was the fourth strike.

This all began on Dec. 7, 1996. Police armed with a search warrant and acting upon information supplied by New York law enforcement raided Walters's Sierra Sports betting office. They confiscated his computers and froze his bank accounts.

Walters was a high-profile gambler in Las Vegas but the allegations were that he was also bookmaking. A thorough check of his computers revealed he was placing large bets, but there was no evidence he was taking in action.

Obviously, there are no laws in Las Vegas against making bets. In fact, that activity is strongly encouraged.

Prosecutors changed direction and charged Walters with money laundering. Three indictments have been leveled at Walters and associates, and now for the fourth time they have been dismissed.

The three other men involved are Jimmie Hanley, Walters's security chief; Daniel Pray, his computer chief, and John Tognino of New York.

Walters has gone through hell the past six years. His cost of doing business - he develops golf courses among other things - has skyrocketed because lenders have charged him extra points on loans.

He had $2.8 million seized, which has not earned a penny in interest in six years. His computer and office equipment would cost tens of thousands of dollars to replace. He has had to post more than $1 million to satisfy liens placed on his properties. His legal fees have exceeded $1 million over six years.

And, his reputation may have been tarnished because of all of the allegations.

Gibson's ruling was so comprehensive that the district attorney's office believes there is little room for appeal, thus the Walters case will be terminated. The cost of prosecuting Walters to the taxpayers of Nevada has easily reached $1 million or more.

While the public applauds law enforcement's dogged pursuit of real bad guys like terrorists and drug dealers, the case against Billy Walters seems like misdirected American justice.

Richard Eng is the turf editor for the Las Vegas Review-Journal and host of the Race Day Las Vegas Wrap Up Show.