Lawyer Indicted for Winning $50 Million in Head’s Up Games

Tom Goldsteinone of the country’s most established and respected private attorneys, has spent most of the last decade appearing before the Supreme Court of the United States (SCOTUS) and writing for a leading legal blog that he co-founded.

During the same period, Mr. Goldstein competed in “ultra-high-stakes” poker games from Beverly Hills to Asia, beating three players for a total of $50 million and ultimately losing more than 14 million dollars. He flew from Hong Kong to Washington, D.C., with a duffel bag containing $968,000 in cash. He helped a Hollywood actor recover $7.8 million in poker winnings from a Texas billionaire who refused to pay.

And now federal authorities are accusing him of defrauding the taxman from 2016 to 2022 and using money from his law firm to cover his eight-figure poker losses.

The charges issued Thursday by the Maryland District Attorney’s Office further accuse Goldstein, who represented Vice President Al Gore in a landmark U.S. Supreme Court (SCOTUS) case that decided the election of 2000, of making false statements to mortgage lenders, for the purchase of a multi-million dollar home and of paying salaries to women with whom he had a personal relationship, but who only worked little or no his law firm, Goldstein & Russell, P. C (G&R).

Read more about Goldstein’s indictment

A $50 million win in heads-up matches

The indictment details Goldstein’s poker activity beginning in 2014, when he participated in high-stakes poker matches “involving stakes totaling millions, if not tens of millions, of dollars.” He financed these games by selling shares to unidentified 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 individual other than Goldstein is identified in the indictment).

Goldstein won $13.8 million in his first match against “Foreign Gambler-1” in Asia, then $26.4 million in his second match against “California Businessman-2” in Beverly Hills. Goldstein continued his momentum by defeating “Foreign Gambler-2” for $8.8 million in Asia in his third head-to-head.

In total, Goldstein and his investors made a profit of $50.8 million, an average earning rate of $660,000 per hour over 77 hours – a colossal sum that he allegedly failed to report on his tax form. 2016 tax.

The same year, Goldstein “was involved in other heads-up and ring poker games…in which he lost millions of dollars.” To repay these debts, Goldstein used funds from his law firm, Goldstein & Russell, PC (G&R), a practice that reportedly continued for several years.

Over $14 Million in Poker Debts

The following year, heads-up nosebleed matches were less favorable to Goldstein. He lost a series of matches against “California Businessman-3” for a loss of around $10 million. The worst part was that Goldstein had 100% of his stock and was therefore responsible for fully covering his losses.

Federal authorities accuse Goldstein of diverting legal fees from G&R to cover these losses without the company’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 revealing that he had already lost $10 million, which “falsely implied that the ‘investment’ of $500,000 that (Goldstein) was seeking was intended to fund a future match…rather than to pay off an existing debt.”

Goldstein found financiers for subsequent matches, but lost a total of $16 million. As of mid-2018, he still owed the California businessman $6 million and obtained a certificate promising to repay the sum and interest by May 2020. He competed in other high-stakes matches high with smaller spreads, including a 2019 match against a California film producer that ended in a $170,000 loss.

Goldstein also continued not to report his 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 agents (TSA), but later stating it was a “loan” in a 2020 phone call with the Internal Revenue Service (IRS).

As of 2021, Goldstein had over $14 million in poker debts – $9.9 million to “California Businessman-1” and $4.5 million to “California Businessman-3” – and several more millions of dollars taxes to pay. He admitted as much two years earlier in an email to the legal representative of a woman who threatened to sue him, saying it would be “totally and completely unnecessary” because he “owed over $16 million privately” and that he had “huge back taxes.”

Despite his seven-figure tax bill, federal authorities say Goldstein spent millions on luxury items and personal expenses.

Other allegations against Goldstein outlined in the indictment include falsely omitting his tax and poker debts on two separate mortgage applications, which allowed him to obtain a nearly $2 million loan , and engaging in poker-related cryptocurrency transactions without disclosing them to the IRS.

For example, he made $8 million worth of cryptocurrency transactions in 2021, but answered “no” on his tax forms when asked about these transactions.

Goldstein also reportedly represented a Hollywood actor who won more than $15.6 million in a December 2019 poker match in Dallas against a Texas billionaire who had yet to pay off his losses in 2021. The actor was expected to to Goldstein a fee of $500,000, which, instead of going to Goldstein’s law firm, was sent to “California Businessman 3” to repay his debt.

The charges against Goldstein carry heavy penalties. He faces a maximum of five years in prison for each count of tax evasion, 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 is also liable to financial sanctions and compensation.

The IRS Criminal Investigative Services and the Federal Bureau of Investigation (FBI) are assisting the United States Attorney’s Office in the investigation.

Goldstein’s lawyers disputed the accusations in a statement provided to PokerNews.

“Mr. Goldstein is a distinguished attorney with an impeccable reputation,” wrote John Lauro of Lauro & Singer and Christopher Kise of Continental. “We are deeply disappointed that the government has made these accusations in a rush to judgment without understanding all the important facts. Our client intends to vigorously contest these charges and we expect him to be exonerated at trial.”

Crazy game and extensive history in poker

Goldstein started playing poker in 2003 when Chris Moneymaker scored a historic World Series of Poker (WSOP) Main Event victory that changed poker forever.

“I was one of those people who started watching poker on ESPN,” Goldstein told Washington Post in 2008.

That year, he won a seat in the WSOP Main Event and participated in an 18-hour cash game at the Bellagio in Las Vegas, documented in a Two Plus Two thread. Goldstein played so wildly in the $25/$50 game that he caught the attention of poker pros Johnny Chan et Greg Mueller.

“I’ve never seen anyone play so recklessly and yet crash the table like Tom did,” wrote Two Plus Two user “88Orange”. “Tom would raise to $400 – $500 without looking at his cards 19 times out of 20, then he would bet, raise and call often, but not always, until the last card was placed on the board, when he looked at his cards for the first time…. *Sometimes he bet all the streets, including HUGE bets – $30,000 on the river and, at the end of the hand, his opponent would ask him: “What’s wrong with you?” *He sometimes replied: “Let’s find out together.” . because he still hadn’t seen his cards! * You would never know if, on THIS hand, he looked at his cards before betting. »

“Tom went from $12,000 to over $100,000, then back down to around $20,000, then back up to over $100,000. He ended up with less than that, but he ended up with a win. »

Goldstein gambled just as recklessly 16 years later, when he sat anonymously at the Hustler Casino Live Million Dollar Game. He notably folded the winning hand of a $540,000 pot at showdown, a hand that left the poker community perplexed 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 its lobbying for the legalization of poker in the United States in the run-up to the 2011 Black Friday scandal and represented a another top player Dan Bilzerian in a controversial 2014 case where an adult film actress was injured during a promotional photo shoot.

Coincidentally, Bilzerian also claims to have won over $50 million in private poker games.

_{*Photos courtesy WikiCommons}