Tom Goldstein Rests Case in Tax Trial Over High-Stakes Poker Games
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The defense rested its case during the sixth week of the Tom Goldstein trial, setting the stage for closing arguments and jury deliberations in the high-profile federal tax case that has captivated the legal and poker worlds.
Goldstein faces tax and mortgage fraud charges in a case that, for six weeks now, has featured testimony from billionaires, celebrities and poker pros like Andrew Robl, who told jurors about coaching and staking Goldstein in heads-up matches that produced $50 million in profit.
The case has also offered insight into other high-stakes matches Goldstein played against prominent poker players like Dan "Jungleman" Cates, Tony Gregg and Chamath Palihapitiya.
Bloomberg Law reported that Goldstein rested his defense on Tuesday after calling its final witness and that jury deliberations could begin as early as Wednesday afternoon.
Goldstein Bolsters Strong Defense
With a decades-spanning reputation as a superstar lawyer, no one should've been surprised that Goldstein put on a sturdy and multifaceted defense in his criminal tax fraud trial in Greenbelt, Maryland.
Goldstein was initially indicted on 22 counts, but that narrowed to 16 as his trial got underway in January. The government's tax fraud allegations against Goldstein then took a hit during Week 4, when his accountant admitted during cross-examination to have made some errors in preparing Goldstein's tax returns, as well as unintentionally providing incorrect information about Goldstein's gambling records to IRS investigators.
Charges Against Tom Goldstein
| Count | Charge & Year | Count | Charge & Year |
|---|---|---|---|
| 1 | Tax evasion (2016) | 9 | Aiding and assisting in preparation of a false tax return — IRS Form 1040 (2021) |
| 2 | Aiding and assisting in preparation of a false tax return — IRS Form 1040 (2017) | 10 | Willful failure to timely pay taxes (2017) |
| 3 | Aiding and assisting in preparation of a false tax return — IRS Form 1120-S (2017) | 11 | Willful failure to timely pay taxes (2019) |
| 4 | Aiding and assisting in preparation of a false tax return — IRS Form 1040 (2018) | 12 | Willful failure to timely pay taxes (2020) |
| 5 | Aiding and assisting in preparation of a false tax return — IRS Form 1120-S (2018) | 13 | Willful failure to timely pay taxes (2021) |
| 6 | Aiding and assisting in preparation of a false tax return — IRS Form 1040 (2019) | 14 | False statement to mortgage lender — First Savings Mortgage Corporation (Feb. 24, 2021) |
| 7 | Aiding and assisting in preparation of a false tax return — IRS Form 1120-S (2019) | 15 | False statement to mortgage lender — First Savings Mortgage Corporation (Mar. 1, 2021) |
| 8 | Aiding and assisting in preparation of a false tax return — IRS Form 1040 (2020) | 16 | False statement to mortgage lender — NFM Lending (Sept. 29, 2021) |
White collar criminal defense attorney Andrew Bernstein told PokerNews the accountant's cross-examination was "a potential huge misstep" in the government's case, which he described as "pretty strong" overall.
Goldstein then made the risky move of taking the stand, opening himself up to potentially being grilled on cross examination. Unlike Goldstein's $385,000 racing wager with Dan Bilzerian, this bet may have paid off.
In a podcast interview, Bloomberg Law legal reporter Holly Barker said she believed Goldstein's testimony — in which he denied ever intentionally evading taxes, explained the peculiarities of the gambling world, and even claimed to have over-reported his gambling income for 2016 — ultimately helped him.
"I really do actually, on balance, think it did help him," Barker said in a Feb. 13 episode of the Bloomberg Law Podcast. "Because the jurors needed someone to fill in all the gaps. Sort of to explain how all of the gambling worked and to explain how they would swap debt, they would hold onto winnings for somebody else for a while.”
Duffel Bag of $1 Million Cash Was a Loan
Goldstein also undercut the government's allegation that the $1 million in cash he carried through customs was gambling winnings. He provided evidence that the cash was a loan from Malaysian gambler Paul Phua that he intended to use to pay his taxes.
That evidence included text messages reviewed by PokerNews that show Goldstein and Phua discussing two separate $1 million loans.
"Do you happen to know whether the remainder of the loan will be ok with Richard?" Goldstein wrote in October 2018, likely referring to poker player Richard Yong. "Apologies for the bother. Just got another communication from the IRS."
"We are all losing a lot. I will see what can be done on Monday," responded the recipient, who was identified as Phua in court documents. Phua added, "Will another million be enough ?"
In a court filing, Goldstein's attorneys wrote that "this message directly undercuts the government’s theory that the $1 million cash Mr. Goldstein received from Mr. Phua in October 2018 represented gambling winnings because in that message thread — dated about a week before Mr. Goldstein flew to Asia to retrieve the cash — Mr. Goldstein explicitly asks Mr. Phua for a $1 million loan following 'another communication from the IRS.'"
What's Ahead in "Fascinating" Case?
Despite some missteps, the government built a comprehensive case over a month of testimony from dozens of witnesses, including Spider-Man star Tobey Maguire (who Goldstein helped recover a multimillion-dollar poker debt from Andy Beal), California real estate mogul Bob Safai (who Goldstein lost $14 million of his own money to), and billionaire Alec Gores (who Goldstein beat for a personal-best $26.4 million, most of which went to his backers).
The prosecution witnesses also included accountants, IRS investigators and mortgage lenders who testified that Goldstein hadn't reported millions of dollars of gambling debts on home mortgage applications, which Goldstein admitted to but said he did to hide the losses from his wife.
Now that the prosecution and defense have rested their cases, the jury will hear closing arguments, which Bernstein told PokerNews could be a highlight of the trial consisting of "poker analogies and fireworks."
"I think the summations should be fascinating," the legal expert said.
Doug Polk, himself a heads-up expert, broke down the case in a recent YouTube video. "This case is fascinating, with so many details leaking out about the inner workings of the ultra high-stakes private game world," Polk said.
