A prominent Maryland attorney who allegedly won and lost tens of millions of dollars playing high stakes poker has been indicted by a federal grand jury on a handful of charges ranging from tax evasion to making false statements to mortgage lenders.
The details within the 22-count indictment against Thomas C. Goldstein, the 54-year-old lawyer, owner of a boutique law firm specializing in appellate litigation before the U.S. Supreme Court, Harvard professor and founder of the popular SCOTUSblog, are straight out of a movie.
$50 million from three players
According to the 50-page indictment, in 2016, Goldstein:
Won about $50 million playing heads-up poker against three players in the fall of 2016, starting with “Foreign Gambler-1” in Asia. To prepare for his September matches, Goldstein consulted with two unnamed professional poker players who coached and had a piece of the attorney. They even used computer simulation to get Goldstein ready for battle.
“As part of his preparation for the heads-up match with Foreign Gambler-I, GOLDSTEIN authored and discussed with Professional Gambler-I and Professional Gambler-2 a 24-page memorandum detailing the strategy and tactics he had devised, based on Foreign Gambler-1 ‘s playing patterns, GOLDSTEIN’s past mistakes when playing him, information gathered from other poker players, and computer simulated practice,” reads the indictment.
The practice and coaching paid off to the tune of $13.8 million.
Goldstein then played a few heads-up matches with “California Businessman-2” in November and December, winning $26,435,000, which was transferred to Goldstein the same months. The businessman who lost that chunk also filed a Form 1099 with the IRS, which put the payment on record.
On a roll, Goldstein returned to Asia to play “Foreign Gambler-2,” who lost $8.8 million to the litigator. Investigators know this because Goldstein reported his results to his professional poker playing teachers, who had a 2% and 5% piece of him each. They received their payments ($178,000 and $403,000) on Dec. 23, 2016, via wire transfer.
He also reported to “Professional Gambler-I” and “Professional Gambler-2” the win rate against the three “targets” of $660,000 per hour over 77 hours through 11 sessions. That adds up to the $50,900,000. Goldstein only reported $13,687,050 in winnings for 2016, according to the DOJ.
But Goldstein’s luck turned in late 2016 and into 2017, where, according to the indictment, he lost nearly $10 million to “California Businessman-3,” whose millions came from investing in real estate.
After that, according to a press release from the U.S. Department of Justice:
“Goldstein allegedly engaged in a scheme to evade his taxes. Goldstein allegedly took various steps to carry out his scheme including diverting legal fees that were due to the law firm to his personal bank account, and then using them to pay personal poker-related debts; using the law firm’s assets to satisfy his personal poker debts and causing those payments to be falsely classified as “legal fee” expenses on the firm’s books and records; and using firm assets to pay salaries and health insurance premiums for people with whom Goldstein had a personal relationship but who performed little or no work for the law firm and did not qualify for its health insurance.
Goldstein also allegedly did not report, or falsely understated, millions of dollars of gambling winnings on his tax returns. In addition, for 2016 through 2021, except 2018, Goldstein allegedly did not pay the taxes he self-reported were due on his returns, while simultaneously spending millions of dollars on personal expenses such as gambling debts, travel, vacation rentals and luxury goods.”
His poker debt reached $14 million by 2021, and he was facing liens on his properties for failing to pay his taxes. That same year, “Goldstein also allegedly submitted false mortgage applications to two separate mortgage lending companies, seeking financing to purchase a $2.6 million home in Washington, D.C.
On those mortgage applications — which required Goldstein to list all his liabilities and debts — Goldstein allegedly omitted millions of dollars of liabilities, including over $14 million he owed at the time on two promissory notes, as well as taxes he owed to the IRS. Goldstein’s false statements to one of the mortgage lenders allegedly resulted in his obtaining a $1.98 million loan,” according to the indictment.
The poker-playing lawyer
Goldstein is not an unknown player or persona in the world of high stakes poker and the people who populate it.
Back in 2008, the American Bar Association called Goldstein a “formidable” player after he won his way into the WSOP Main Event and had a $100,000 night playing cash at the Bellagio. Their website also noted that he represented Dan Bilzerian after a porn-star sued him for throwing her off a roof into a pool, which resulted in a broken foot. In that article, he’s called a “poker-playing lawyer.”
But his relationship with Bilzerian goes beyond the court room. As outlined by an article in The Atlantic, they were buddies who would do such things as bet $300,000 on whose muscle car was faster — Goldstein’s 2011 Ferrari 458 or Bilzerian’s 1965 Shelby Cobra (Bilzerian won, which also required Goldstein to smoke marijuana for the first time).
Goldstein also appears in Bilzerian’s book “Setup,” where they fly to Montenegro together to party on a yacht with poker-playing billionaire Bill Perkins and so many women that they had to rent a bigger boat.
He also defended Paul Phua, the Malaysian businessman who founded Triton Poker and its series in 2014. Phua became a member of the uber-rich by running an online sports betting site called IBCBet. He also worked with casinos in Macau bringing in VIP high-rollers –including poker players — to gamble, which earned him a piece of their play.
He found himself in front of a judge in Nevada after being accused of taking bets from a $40,000-a-night villa at Caesar’s Palace.
According to a major ESPN article on Phua: “Phua, in addition (to lawyer David Chesnoff, who represented Phil Ivey in a divorce), hired one of Tom Dwan’s poker acquaintances, Washington attorney Tom Goldstein, who has argued 36 cases before the Supreme Court and teaches law at Harvard.”
They got Phua off.
There’s also a two-plus-two thread titled Craziest Poker Game of My Life, which paints Goldstein as a sincere and polite poker maniac who loved to play hands without looking at them.
“And, despite having the heart and courage of a warrior, Tom is as nice and mild-mannered as people come. He wore no jewelry, no loud clothes, no big watch, and no big ego. For 18 hours, he was affable, engaging, modest, and never lied or showed any irritability despite every player in the game – and in the poker room – wanting to get a piece of this ‘crazy maniac.’ If you had to pick the king of insane poker maniacs of all players in all games in the Bellagio poker room, by appearance only, Tom might be your last pick,” wrote 88Orange.
If convicted, Goldstein faces a maximum penalty of five years in prison for each tax evasion charge; a maximum penalty of three years in prison for each count of assisting in the preparation of false tax returns; a maximum penalty of one year in prison for each of count of willful failure to pay taxes; and a maximum penalty of 30 years in prison for each count of making false statements to mortgage lenders. He also faces a period of supervised release, fines and restitution.
Lawyer, legal podcaster, and writer David Lat reached out to Goldstein for a comment, and was sent this by a PR firm representing Goldstein:
“Mr. Goldstein is a prominent attorney with an impeccable reputation. 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.”
