Right now, there are more than 1.3 million lawyers practicing in America. (How’s that for a scary opener?) At the same time, the United States Supreme Court accepts just 100-150 cases per year. That means most lawyers never get within sniffing distance of arguing in front of the nine justices. For those who do, it’s usually the honor of a lifetime. They leave the building with handcrafted souvenir quill pens the Court gives to lawyers who appear before them.
Tom Goldstein has argued 44 of those cases. He started by scouring appellate courts for “circuit splits,” where two or more circuits disagreed. Then he cold-called plaintiffs to help resolve the split all the way at the top. He lost his first case, 9-0. But just getting in front of the court sent him off to the races. He launched Supreme Court litigation clinics at Stanford and Harvard, trading exposure for unpaid labor. And he established SCOTUSblog to publish real-time news about the court’s actions and decisions.
You’d think a guy with 44 of those souvenir quills would have squeaky clean personal history. Thus, it was a shock to DC insiders last month when the DOJ filed a 50-page indictment hitting Goldstein with 22 various offenses including words like “tax evasion” and “fraud.”
It turns out Tom Goldstein loves poker. But not the kind of friendly game you play with your friends in your basement, or even the kind you play with strangers at a casino. He sought out high-stakes private games with millions of dollars at stake in places like Las Vegas and Macau. He earned a reputation as a “maniac” – someone who plays nearly every hand aggressively and bluffing as much as he can.
Goldstein borrowed millions to play with high rollers. While he occasionally won, he lost even more, creating enormous debts. That sort of cash flow can be hard to manage. So Goldstein diverted legal fees to pay gambling debts (meaning the IRS didn’t get their share), failed to report his winnings (meaning the IRS didn’t get their share), fraudulently recorded fee income as a capital contribution to his law firm (meaning the IRS didn’t get their share), and various other accounting shenanigans (mostly meaning the IRS didn’t get their share). His story also involves a duffel bag with $986,000 in cash, along with colorful-sounding characters like “California Businessman-1,” “Foreign Gambler-1” & “Foreign Gambler-2,” and “Professional Gambler-1” & “Professional Gambler-2.”
He also failed to report interest and crypto income. He hired several mistresses for no-show jobs at his law firm. And he omitted north of $15 million gambling and tax debts on three separate mortgage applications for his $2.65 million house in DC’s posh Wesley Heights neighborhood.
Goldstein pleaded not guilty, and now he’s playing for the highest stakes in his life. Prosecutors expect to offer tens of thousands of documents and call up to 80 witnesses. Time will tell if he folds his cards before trial, or if he’s hiding an ace up his sleeve. Otherwise, he’s staring down decades in a place where the poker stakes are limited to tins of fish. (The bank fraud charges alone carry up to 10 years each!)
Tom Goldstein is hardly alone in watching a gambling problem destroy his finances and his life. He just did it with more panache. And while there may be no immediate lesson for you, it’s a good reminder that the IRS, even working with a diminished budget, still holds tax offenders accountable. So call us at Excel Empire to celebrate your big wins, and let us help keep you out of trouble!
