Indicted Lawyer Allegedly Won $50 Million in Heads-Up Poker Matches
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As one of the most established and respected private lawyers in the country, Tom Goldstein spent much of the past decade appearing before the US Supreme Court (SCOTUS) and writing for a prominent legal blog that he co-founded.
In the same time period, Goldstein allegedly played in "ultra-high-stakes" heads-up poker matches from Beverly Hills to Asia, beating three players out of a combined $50 million and later ending up down over $14 million. He flew from Hong Kong to Washington, D.C. with a duffel bag of $968,000 in cash. He helped a Hollywood actor recover $7.8 million in poker winnings from a Texas billionaire who hadn't paid out.
And now, federal officials are accusing him of evading income taxes from 2016 to 2022 and using money from his law firm to help cover his poker losses.
The 22-count indictment issued Thursday by the US Attorney's Office District of Maryland further accuses Goldstein, who represented Vice President Al Gore in a landmark US Supreme Court (SCOTUS) case that decided the 2000 election, of making false statements to mortgage lenders for the purchase of a multi-million dollar home and paying the salaries of women who he had a personal relationship with but who did little to no work for his law firm, Goldstein & Russell, P.C (G&R).
Read More About Goldstein's Indictment
Winning $50 Million in Heads-Up Matches
The indictment details Goldstein's poker activity beginning in 2014, when he allegedly played in high-stakes poker matches "involving stakes totaling millions, and even tens of millions, of dollars." He financed these games by selling action to unnamed high-stakes poker players and "borrowing millions of dollars."
In 2016, Goldstein played a series of high-stakes heads-up matches against "three ultra-wealthy individuals" and hired two professional poker players to coach and stake him. (No individuals other than Goldstein are identified in the indictment.)
Goldstein won $13.8 million in his first match against "Foreign Gambler-1" in Asia, which he followed up in a second match against "California Businessman-2" in Beverly Hills for $26.4 million. The hot streak continued as Goldstein took "Foreign Gambler-2" for $8.8 million in Asia in his third heads-up match.
It added up to a $50.8 million profit, or an average win rate of $660,000 per hour over 77 hours for Goldstein and his backers — a massive sum that he allegedly failed to report on his 2016 tax form.
The same year, Goldstein "was involved in other heads-up and ring poker matches ... in which he lost millions of dollars." To pay off these debts, Goldstein is said to have used funds from his law firm, Goldstein & Russell, P.C (G&R), a practice that allegedly continued for several years.
Over $14 Million in Poker Debts
The next year's nosebleed heads-up matches were less kind to Goldstein. He allegedly lost a series of matches against "California Businessman-3" for a loss of around $10 million. Worst of all, Goldstein had 100% of his action and was therefore responsible for fully covering his losses.
Federal officials allege Goldstein diverted legal fees from G&R to cover these losses without the firm's knowledge through a series of wire transfers. Goldstein also allegedly contacted another law firm and asked if they were interested in investing in the matches without disclosing that he was already down $10 million, which "falsely implied that the $500,000 'investment' (Goldstein) was seeking was to fund a future match ... rather than to pay an existing debt."
Goldstein secured backers for later matches but overall lost $16 million. By mid-2018, he still owed the California businessman $6 million and secured a promissory note promising to pay the sum and interest back by May 2020. He played in other high-stakes matches with smaller swings, including a 2019 match against a California movie producer resulting in a $170,000 loss.
Goldstein also allegedly continued to fail to report winnings. In 2018, he flew from Hong Kong to Dulles International Airport with a duffel bag containing $968,000 in poker winnings, identifying it as such to Transportation Security Administration (TSA) officials but later claiming it as a "loan" in a 2020 phone call with the Internal Revenue Service (IRS).
By 2021, Goldstein is said to have had more than $14 million in poker debts — $9.9 million to "California Businessman-1" and $4.5 million to "California Businessman-3" — and several more million owed in taxes. He acknowledged as much two years earlier in an email to a legal representative of a woman threatening to sue him, stating that doing so would be "totally and utterly pointless" because he "owe[d] more than $16 million privately" and had "a massive tax lien."
Despite his seven-figure tax bill, federal officials allege Goldstein spent millions on luxury items and personal expenses.
Helping a Hollywood Actor Get Paid by Texas Billionaire
Other allegations against Goldstein outlined in the indictment include falsely omitting his tax and poker debts on two separate mortgage applications, which enabled him to obtain a nearly $2 million loan, and engaging in poker-related cryptocurrency transitions without disclosing them to the IRS.
For example, he allegedly conducted $8 million worth of crypto transactions in 2021 but answered "no" on his tax forms when asked about such transactions.
Goldstein also allegedly represented a Hollywood actor who won over $15.6 million in a December 2019 poker match in Dallas against a Texas billionaire who hadn't paid out his losses by 2021. The actor owed Goldstein a fee of $500,000, which, instead of going to Goldstein's law firm, was sent to "California Businessman-3" to pay down his debt.
The charges against Goldstein carry stiff penalties. He faces a maximum of five years in prison for each of the tax evasion charges, three years for each count of tax falsification, one year for each count of willful failure to pay taxes, and 30 years for both counts of making false statements to mortgage lenders. He also faces monetary penalties and restitution.
The IRS Criminal Investigation and Federal Bureau of Investigation (FBI) are assisting the US Attorney's Office in the investigation.
Goldstein's attorneys disputed the charges in a statement provided to PokerNews.
"Mr. Goldstein is a prominent attorney with an impeccable reputation," wrote John Lauro of Lauro & Singer and Christopher Kise of Continental. "We are deeply disappointed that the government brought these charges in a rush to judgment without understanding all of the important facts. Our client intends to vigorously contest these charges and we expect he will be exonerated at trial."
Wild Play & Extensive Poker History
Goldstein began playing poker in 2003 when Chris Moneymaker memorably won a historic World Series of Poker (WSOP) Main Event that changed poker forever.
"I was one of those people who just got caught up watching poker on ESPN," Goldstein told The Washington Post in 2008.
That year, he won a seat in the WSOP Main Event and played an 18-hour cash game session at the Bellagio in Las Vegas that was documented in a Two Plus Two thread. Goldstein played so crazily in the $25/$50 game that it caught the attention of poker pros Johnny Chan and Greg Mueller.
"I have never seen anyone play so recklessly and yet crush the game as Tom did," wrote Two Plus Two user "88Orange." "Tom would raise to $400 - $500 without looking at his cards 19 out of 20 hands and then he would often but not always bet, raise and call until the the final card was put up on the board, when he would look at his cards for the first time . . . *sometimes, he would bet all streets, including HUGE - $30,000 river bets and at the end of the hand, his opponent would say, 'what do you have?' *He would sometimes reply, 'Let's find out together' . . . because he still had not seen his cards! * You would never know if on THIS hand, he had looked at his cards in advance of betting."
"Tom went from 12K to over 100K, back down to about $20K and then back up to over 100K. He ended with less than that, but he ended with a win."
Goldstein played just as recklessly 16 years later when he sat down anonymously in the Hustler Casino Live Million Dollar Game. He infamously mucked the winning hand in a $540,000 pot at showdown, a hand that had the poker community confused as to what they had just witnessed.
Goldstein has represented poker players on several occasions. He served as counsel for the Poker Players Alliance in lobbying for the legalization of poker in the US ahead of poker's 2011 Black Friday scandal and represented fellow high-stakes player Dan Bilzerian in a controversial 2014 case where an adult film actress was injured during a promotional shoot.
Coincidentally, Bilzerian also claims to have won upwards of $50 million in private poker games.
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*Photos courtesy WikiCommons
