* Billy Walters accused of making over $43 mln illegal gains
* Walters "received a full and fair trial" - judge
* Judges criticize FBI agent's leaks to reporters
By Jonathan Stempel
NEW YORK, Dec 4 (Reuters) - A federal appeals court on Tuesday upheld the insider trading conviction and five-year prison sentence of famed Las Vegas sports gambler William "Billy" Walters, even as it chastised an FBI agent for leaking grand jury information about the case.
Walters, 72, had been accused of using nonpublic information from former Dean Foods Co Chairman Thomas Davis about the dairy processing company and from Olive Garden parent Darden Restaurants Inc to make more than $43 million in profits and avoided losses from 2008 to 2014.
The 2nd U.S. Circuit Court of Appeals in Manhattan said Walters' April 2017 conviction was not unconstitutionally tainted by several leaks from Federal Bureau of Investigation Special Agent David Chaves to reporters about the grand jury probe.
It also rejected Walters' claims that prosecutors suborned perjury by Davis over the use of a disposable cellphone nicknamed the "Batphone" to provide tips, and that the evidence didn't support his conviction related to Darden.
"Walters received a full and fair trial in which there was overwhelming evidence to support his conviction," Circuit Judge Denny Chin wrote for a 3-0 appeals court panel.
While "Chaves' misconduct is deeply troubling," it did not qualify as "outrageous government misconduct" that could justify dismissing the case, Chin added.
The court also upheld Walters' $10 million fine and $25.35 million forfeiture. It ordered the trial judge, Kevin Castel, to recalculate Walters' $8.88 million in restitution to Dean Foods in light of a recent U.S. Supreme Court decision.
Circuit Judge Dennis Jacobs, in a concurring opinion, called Chaves' leaks "in some respects more egregious" than Walters' crimes.
"The FBI depends on the confidence of the public, jurors and judges," Jacobs wrote. "That confidence is critical to its mission; so this kind of thing is very bad for business."
Alexandra Shapiro, a lawyer for Walters, did not immediately respond to requests for comment. A spokesman for U.S. Attorney Geoffrey Berman in Manhattan declined to comment.
Walters had built an estimated $200 million fortune as one of the most successful U.S. sports betters.
He had maintained his innocence, and told reporters after his conviction: "I just did lose the biggest bet of my life."
The case drew added attention because of Walters' relationships with billionaire investor Carl Icahn and champion golfer Phil Mickelson, neither of whom was criminally charged.
Mickelson, who once had gambling debts to Walters, agreed in May 2016 to forfeit $1.03 million he made on Dean Foods shares to settle a U.S. Securities and Exchange Commission civil case.
The case is U.S. v. Walters, 2nd U.S. Circuit Court of Appeals, No. 17-2373. (Reporting by Jonathan Stempel; Editing by Jeffrey Benkoe)