UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

 

 

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UNITED STATES OF AMERICA SEALED INFORMATION
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THOMAS c. DAVIS, I 
Defendant. .
COUNT ONE

(Conspiracy to Commit Securities Fraud)
The United States Attorney charges:
Relevant Entities and Individuals

1. At all times relevant to this Information, Dean
Foods Company (?Dean Foods? or the ?Company") was one of the
pleading dairy companies in the United States with headquarters
in Dallas, Texas. At all times relevant to this Information,
Dean Foods was a public company whose stock traded on the New
-York Stock Exchange under the ticker symbol Dean
Foods? written policies prohibited the unauthorized disclosure 2
of Dean Foods? confidential information, including material non~
public information, which specifically included earnings
information, business plans and forecasts, longwrange strategic
plans, and information related to pending litigation involving

Dean Foods.

2. At all times relevant to this Information, THOMAS

 DAVIS, the defendant, was a member of the Board of Directors
of Dean Foods (the ?Board?), and from on or about May 1, 2013
until on or about August 7, 2015, DAVIS served as the None
Executive Chairman of the Board. In his capacity as a member of
the Board, DAVIS regularly received confidential information
about Dean Foods? financial performance and results,
contemplated and actual corporate transactions, and other
significant corporate and strategic developments prior to Dean
Foods? public announcements of such information (the ?Inside
Information"). As a director of Dean Foods, DAVIS had a
fiduciary duty, among other obligations, to maintain the
confidentiality of all of Dean Foods? confidential information,
including the Inside Information. At various times, DAVIS
reviewed and certified his understanding of his duties of
loyalty and confidence to Dean Foods:

From at least in or about 2008 until in or about
October 2012,'WhiteWaveeAlpro was a segment of Dean Foods that
produced and distributed organic and other branded food and
beverage products. On or about August 7, 2012, Dean Foods
publicly announced that it intended to execute a spinoff of its
WhiteWave?Alpro segment through The WhiteWave Foods Company (the
?WhiteWave Spinoff?), a public company which was headquartered 
in Denver, Colorado (?WhiteWave?). On or about October 31,

2012, WhiteWave formally spun off from Dean Foods and, pursuant

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to an Initial Public Offering traded on the NYSE under
the ticker symbol 

4. At all times relevant to this Information, Darden
Restaurants, Inc. (?Darden?) owned and operated an assortment of
restaurant brands throughout the United States. Headquartered
in Orlando, Florida, Darden was a public company that traded on
the NYSE under the ticker symbol 

5. At all times relevant to this Information, a co?
conspirator not named as a defendant herein was a
sports bettor, businessman and investor, and served as the Chief
Executive Officer and Chairman of the Board of Directors of a
holding company based in Las Vegas, Nevada that managed
diversified investment and business ventures, including golf
courses, real estate developments, and other investments. 
was also the sole authorized trader for brokerage accounts in
the name of his holding company and an offshore entity that 
controlled (the Accounts").

The Insider Trading Scheme

 

6. From at least 2008 through in or about 2014,
THOMAS C. DAVES, the defendant, participated in a scheme in
which DAVIS provided material nonwpublic information to 
who used that information to purchase and sell securities, all
of which occurred in the Accounts.

7. In furtherance of the scheme, THOMAS C. DAVIS,

 

the defendant, obtained Inside Information through his role as a
member of the Dean Foods Board, including information related to
Dean Foods' financial outlook and performance, earnings results,
and the WhiteWave Spinoff. DAVIS provided Inside Information to
in violation of fiduciary and other duties of trust and
confidence owed by DAVIS to Dean Foods; (ii) expectations of
confidentiality held by Dean Foods; written policies of
Dean Foods regarding the use and safekeeping of confidential
business information; and (iv) agreements between Dean Foods and
DAVIS to maintain information in confidence.

8. In order to evade detection by law enforcement
authorities, provided THOMAS C. DAVIS with a prepaid
cellular telephone for DAVIS to use when disclosing Inside
Information to further instructed DAVIS to-nse code
words when discussing Inside Information with For
example, told DAVIS to use the phrase ?Dallas Cowboys? to
refer to Dean Foods.

9. knowing that THOMAS C. DAVIS, the
defendant, had disclosed the Inside Information to him in
violation of duties of trust and confidence, used the Inside
Information to execute profitable trades in Dean Foods stock,
which earned illegal profits.

10. In addition, THOMAS C. DAVIS, the defendant,

received material nonwpublic information about Darden (the

?Darden Inside Information?) from an investment firm in New York
(?Investment Firm which had solicited DAVIS to become an
investor in, or director of, Darden. DAVIS provided the Darden
Inside Information to in violation of an agreement of
confidentiality between DAVIS and Investment Firm A, and (ii)
fiduciary and other duties of loyalty and confidence owed by
DAVIS to Investment Firm A.

11. knowing that THOMAS C. DAVIS, the
defendant, had disclosed the Darden Inside Information to him in
violation of a duty of confidentiality, used the Darden Inside
Information to execute profitable trades in Darden stock that
earned illegal profits of nearly $1 million.

12; In exchange for providing material non-public
information about Dean Foods and Darden to which used
to make profitable securities trades, THOMAS C. DAVIS, the
defendant, received significant benefits from 00?1, including
business opportunities, investment capital, and approximately $1
million in loans that were, in large measure, never repaid by
DAVIS .

Statutory Allegations

13. From at least in or about 2008 through in or
about 2014, in the Southern District of New York and elsewhere,
THOMAS C. DAVIS, the defendant, and others known and unknown,

willfully and knowingly did combine, conspire, confederate and

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agree together and with each other to commit an offense against
the United States, to wit, securities fraud, in violation of
Title 15, United States Code, Sections 78j(b) and 78ff, and
Title 17, Code of Federal Regulations, Sections 240.10b?5 and
240.10b5w2.

14. It was a part and object of the conspiracy that
THOMAS C. DAVIS, the defendant, and others known and unknown,
willfully and knowingly, directly and indirectly, by the use of
means and instrumentalities of interstate commerce, and of the
mails, and of facilities of national securities exchanges, would
and did use and employ, in connection with the purchase and sale
of securities, manipulative and deceptive devices and
contrivances in violation of Title 17, Code of Federal
Regulations, Sections 240.10b5 and 240.10b5?2 by: employing
devices, schemes and artifices to defraud; making untrue
statements of material fact and omitting to state material facts
necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading;
and engaging in acts, practices and courses of business
which operated and would operate as a fraud and deceit upon
persons, all in violation of Title 15, United States Code,
Sections 78j(b) and 78ff.

Overt Adts

15. In furtherance of the conspiracy and to effect

the illegal object thereof, THOMAS C. DAVIS, the defendant, and
his co~conspirators committed the following overt acts, among
others, in the Southern District of New York and elsewhere:

a. On or about April 9, 2010, DAVIS met with
in Las Vegas, Nevada, at which meeting agreed to
provide DAVIS with a loan of $625,000. At the same meeting,
provided with Inside Information about Dean Foods.

b. On or about July 30 and 31, 2012, DAVIS
?visited in San Diego, California and stayed at CC?l?s home.
During this visit, DAVIS provided with Inside Information
about Dean Foods.

c. On or about August 7, 2013, DAVIS traveled
from Dallas, Texas, to New York, New York, and met with
individuals from Investment Firm?A to discuss the Darden Inside
Information.

d. On or about August 20, 2013, directed
Broker?2, who was located in New York, New York, to purchase
535,200 shares of Darden.

(Title 18, United States Code, Section 371.)

COUNT TWO

(Conspiracy to Commit Wire Fraud)
The United States Attorney further charges:
16. The allegations contained in paragraphs 1 through

12 and 15 of this Information are hereby repeated, realleged,

and incorporated by reference, as if fully set forth herein.

_17. From at least in or about 2008 through in or
about 2014, in the Southern District of New York and elsewhere,
THOMAS C. DAVIS, the defendant, and others known and unknown,
willfully and knowingly, did combine, conspire, confederate, and
agree together and with each other to commit wire fraud, in
violation of Title 18, United States Code, Section 1343.

18. It was a part and an object of the conspiracy

that THOMAS C. DAVIS, the defendant, and others known and

unknown, willfully and knowingly, having devised and intending
to devise a scheme and artifice to defraud, and for obtaining
money and property by means of false and fraudulent pretenses,
.representations, and promises, would and did transmit and cause
to be transmitted by means of wire, radio, and television
communication in interstate and foreign commerce, writings,
signs, signals, pictures, and sounds for the purpose of
executing such scheme and artifice, in violation of Title 18,
United States Code, Section 1343.

(Title 18, United States Code, Section 1349.)

COUNTS THREE THROUGH SIX

 

(Securities Fraud)'
The United States Attorney further charges:
19. ?The_allegations contained in paragraphs 1 through

12 and 15 are hereby repeated, realleged, and incorporated by

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reference, as if fully set forth herein.

20., on or about the dates set forth below, in the
Southern District of New York and elsewhere, THOMAS C. DAVIS,
the defendant, willfully and knowingly, directly and indirectly,
by the use of means and instrumentalities of interstate
commerce, and of the mails, and of facilities.of national
securities exchanges, did use and employ, in connection with the
purchase and sale of securities, manipulative and deceptive
devices and contrivances, and caused others to use and employ
manipulative and deceptive devices and contrivances, in
violation of Title 17, Code of Federal Regulations, Sections
240.10b5 and 240.l0b5w2, by: employing devices, schemes and
artifices to defraud; making, and causing others to make,
untrue statements of material fact and omitting to state, and
causing others to omit to state, material facts necessary in
order to make the statements made, in the light of the
circumstances under which they were made, not misleading; and
engaging, and causing others to engage, in acts, practices
and courses of business which operated and would operate as a
fraud and deceit upon persons, to wit, on the basis of material
non?public information that DAVIS disclosed to in violation
of fiduciary and other duties of trust and 
confidentiality, and in exchange for pecuniary and other

benefits that provided to DAVIS, DAVIS caused to be

executed the securities transactions listed below:

 

 

 

 

 

Count Date Transaction

3 May 8 and 9, Purchase of approximately 1.2 million
2012 shares of Dean Foods

4 July 13, 17, 18, Purchase of approximately 2.8 million
23, 24 and 31, shares of Dean Foods
2012

5 September 17, Purchase of approximately 815,953
18, 19, and shares of Dean Foods
October 9 and
11, 20l2

6 August 20 and Purchase of approximately 625,000
21, 2013 shares of Darden 

 

 

 

 

 

(Title 15, United States Code, Sections 78j(b) 78ff;
Title 17, Code of Federal Regulations, Sections 240.10b5 and
240.10b5w2; and Title 18, United States Code, Section 2.)

COUNTS SEVEN TEN

 

(Wire Fraud)

She United States Attorney further charges:

21. The allegations contained in paragraphs 1 through
12 and 15 are hereby repeated, realleged, and incorporated by
reference, as if fully set forth herein.

22. On or about the dates set forth below, in the
Southern District of New York and elsewhere, THOMAS C. DAVIS,
the defendant, willfully and knowingly, having devised and
intending to devise a scheme and artifice to defraud, and for
obtaining money and property by means of false and fraudulent
pretenses, representations, and promises, transmitted and caused

to be transmitted by means of wire, radio, and television

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communication in interstate and foreign commerce, writings,
signs, signals, pictures, and sounds for the purpose of
executing such scheme and artifice, to wit, through the use of
interstate wires, including interstate and international
telephone calls, DAVES, who owed fiduciary and other duties of
trust and confidentiality to Dean Foods and Investment Firm A,
participated in a scheme to defraud Dean Foods, its
shareholders, and Investment Firm A, by providing material non?
public information to and caused to be executed the

securities transactions listed below:

 

 

 

 

 

Count Date Transaction

7 May 8 and 9, Purchase of approximately 1.2 million
2012 shares of Dean Foods

8 July 13, 17, 18, Purchase of approximately 2.8 million
23, 24 and 31, shares of Dean Foods
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9 September 17, Purchase of approximately 815,983
18,-19, and shares of Dean Foods 
October 9 and
11, 2012

10 August 20 and Purchase of approximately 625,000
21, 2013 shares of Darden

 

 

 

 

 

(Title 18, United States Code, Sections 1343 and 2.)

COUNT ELEVEN
(Obstruction of Justice)

The United States Attorney further charges:
23. The allegations contained in paragraphs 1 through

12 and 15 of this Information are repeated, realleged, and

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incorporated by reference, as if fully set forth herein.

24. From in or about May 2014 through in or about
June 2014, in the southern District of New York and elsewhere,
THOMAS C. DAVES, the defendant, unlawfully, willfully and
knowingly, corruptly-altered, destroyed, mutilated, and
concealed a record, document, and other object, and attempted to
do so, with the intent to impair the object?s availability for
use in an official proceeding, and corruptly obstructed,
influenced, and impeded an official proceeding, and attempted to
do so, to wit, DAVIS made false statements to federal law
enforcement agents in connection with a grand jury
investigation, in May 2014 and thereafter, attempted to dispose
of a prepaid cellphone by throwing it in a body of water, with
the intent of impairing the phone?s integrity and availability
for the grand jury investigation and/or any subsequent criminal
proceeding.

(Title 18, United States Code, Sections 1512(c)(1)
and (2) and 2.)

COUNT TWELVE
(Perjury)

The United States Attorney further charges:

25. The allegations contained in paragraphs 1 through
12 and 15 of this Information are repeated, realleged, and
incorporated by reference, as though fully set forth herein.

26. On or about May 18, 2015, in the Southern

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District of New York, THOMAS C. DAVIS, the defendant, having
taken an oath before a competent officer and person, in a case
in which a law of the United States authorized an oath to be
administered, that he would testify, declare, depose, and
certify truly, willfully and contrary to such oath, stated and
subscribed to material matters which he did not believe to be
true, to wit, DAVIS, during sworn testimony before the United
States Securities and Exchange Commission gave false testimony
relating to, among other things, his personal finances and net
worth; whether he had accurately filed tax returns on behalf of
himself and/or the Dallas?based charity he oversaw; and whether
he had ever passed inside information to or anyone else
regarding Dean Foods or any other company, including but not
limited to the following false statements:
Q: How did you know to the extent that you

commented on Dean Foods to how did

you know whether or not what you were

commenting on was public information or

information that was not public that you

gleaned from your time on the Board of Dean

Foods?

A. I never gave him any confidential
information. I?m quite certain about that.

 

 

Q. Did you provide [CCwl] with any information
regarding the progress of the WhiteWave
spinoff in July of 2012?

A. I did not.

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Q. Did you ever understand to be a
shareholder of Dean Foods at any time more
recent than the early 2000s?

A. Not that I recall, no.

 

(Title 18, United States Code, Sections 1621 and 2.)

FORFEITURE ALLEGATION

 

27. As a result of committing one or more of the
offenses alleged in Counts One through Ten of this Information,
THOMAS C. DAVIS, the defendant, shall forfeit to the United
States pursuant to Title 18, United States Code, Section
981(a)(1)(c) and Title 28, United States Code, Section 2461, all
property, real and personal, that constitutes or is derived from
proceeds traceable to the commission of the offenses, including,
but not limited to, outstanding loans that were received as part
of the scheme and which were never repaid.

Substitute Assets Provision

 

'28. If any of the above?described forfeitable
property, as a result of any act or omission of the defendant:

a. cannot be located upon the exercise of due
diligence;

b. has been transferred or sold to, or deposited

with, a third party;

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c. has been placed beyond the jurisdiction of the
court;

d. has been substantially diminished in value; or

e. has been commingled with other property which
cannot be divided Without difficulty,
it is the intent of the United States, pursuant to Title 21,
United States Code, Section 853(p), to seek forfeiture of any
other property of the defendant up to the value of the
forfeitable property described above.

(Title 18, United States Code, Sections 981;

Title 21, United States Code, Section 853; and
Title 28, United States Code, Section 2e6l.)

Rat tartar?

PREET BHARARA
United States Attorney

 

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