The Volokh Conspiracy
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Tom Goldstein Was Indicted on Tax Evasion Charges
A Real Farewell to SCOTUSBlog?
Last year I wrote a post title A Requiem for SCOTUSBlog. Publisher Tom Goldstein had announced that the site would be scaling back its coverage of the Court. SCOTUSBlog remains functional, but it is nowhere near as comprehensive as it used to be.
Today's news, however, may signal a real farewell to SCOTUSBlog.
Tom Goldstein was indicted in the U.S. District Court for the District of Maryland on charges of tax evasion, willful failure to pay taxes, false statements, and other charges. The indictment contains some stunning allegations (of course Goldstein remains innocent until proven guilty):
6. In addition to the legal work he performed at G&R [Goldstein & Russell], GOLDSTEIN was also an ultrahigh-stakes poker player, frequently playing in matches or series of matches in the United States and abroad involving stakes totaling millions, and even tens of millions, of dollars. GOLDSTEIN's poker activities included both "ring games" (which typically involved five or more players) as well as "heads-up" matches (which were two-player matches). . . .
10. To make and receive payments related to his gambling and certain other private activities between 2016 and 2022, GOLDSTEIN typically used a personal bank account (''the Gambling Account") over which he exercised exclusive control and authority, including the authority to effectuate transfers. The G&R firm managers did not have access to the Gambling Account. By contrast, GOLDSTEIN permitted the G&R firm managers to share authority with respect to the G&R bank accounts, as well as a different personal bank account for GOLDS1EIN and his wife, through which the G&R firm managers, as part of their official duties, paid certain of GOLDSTEIN's personal bills. . . .
24. Between 2016 and 2022, GOLDSTEIN engaged in a scheme to evade the assessment of taxes, file false tax returns, and fail to pay his tax obligations when they were due.
The allegations go on.
I do not have much to say about these substantive offenses. But I worry that this news may spell the end of SCOTUSBlog. Indeed, the indictment will seek criminal forfeiture of "any property, real or personal, which constitutes or is derived from proceeds traceable to the offenses." Does SCOTUSBlog fall in that category? If so, I hope someone else acquires SCOTUSBlog. It would be a shame to lose this valuable resource.
Update: Shortly after my post went up, I received a statement from a rep for Goldstein:
Hello - Reaching out on behalf of Tom Goldstein, I saw your story. Here is a statement attributed to John Lauro of Lauro & Singer and Christopher Kise of Continental, trial counsel for Mr. 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."
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Start a pool on when his appeals hit the Supreme Court and SCOTUSBlog ....
11. Between 2016 and 2022, GOLDSTEIN was involved in, or pursued, intimate personal relationships with at least a dozen women, transferring hundreds of thousands of dollars to them from his financial accounts or joint bank accounts he set up with the women, and paying for travel and other expenses for many of them. GOLDSTEIN executed these financial transactions while he owed substantial amounts of money to the Internal Revenue Service ("IRS")
12. To supplement or supplant payments he was making personally to three of the women, and to pursue an intimate relationship with a fourth woman, GOLDSTEIN caused the four women to be nominally "hired" as employees of G&R at various points during 2018. That arrangement, GOLDSTEIN explained to the women, allowed the women to be paid by G&R and obtain health insurance under G&R' s policy, for which G&R paid their premiums.
***
Was that wrong? Should I have not done that? I tell you I gotta plead ignorance on this thing because if anyone had said anything to me at all when I first started a firm that that sort of thing was frowned upon, you know, cause I’ve worked in a lot of offices and I tell you people do that all the time.
heh
double heh
Sounds like insurance fraud too, signing up women as fake employees to get health insurance. Is that a federal offense? Maybe not, though, if they were "real" employees in the sense of really being paid by the firm, even if it was for sexual services for the partners.
I don't think that's actually insurance fraud so long as you're paying the premiums.
The Feds seem to be claiming it's fraud, because the insurance is for "employees", and they weren't.
Seems like a stretch to me, but that's what they appear to be trying to do
fwiw - While ScotusBlog had a slight left/liberal tilt in its coverage, it was very fair and reasoned approach in its SC coverage. Its a very rare occasion that ScotusBlog would exhibit any partisan take on the cases before the court.
Knew nothing about guns and it got a bit silly when they fled twitter for a series of failed alternatives, but easily could have been much worse
"Slight"? You're so funny
Maybe it's just Amy Howe, with gems like this https://www.scotusblog.com/2025/01/supreme-court-divided-on-texas-age-verification-law-for-porn-sites/ (it read at least 6-3 for Texas), and this https://www.scotusblog.com/2025/01/supreme-court-skeptical-of-ban-on-tiktok/ (no rational person listening to the arguments or reading the transcripts agrees with her on that)
I'm just amused that, once again, the leftist is refusing to pay the taxes he wants raised on the rest of us
Great point. If there is anything the Left-Right divide is known for; it's that leftists are famous for avoiding taxes, and conservatives are known for voluntarily paying any and all taxes due.
Meanwhile, back on Earth One . . . .
It's morally correct for people who do NOT want to raise taxes, to do their best not to pay any.
it's morally hideous for someone to claim that MY taxes should go up, while he doesn't bother to pay his.
Are those words small enough for your stupid mind to wrap around?
More importantly: is Howe unindicted conspirator, or is she uninvolved? She holds the more precious asset - the Hard Pass.
When I see "vigorously contest" I read "guilty."
Why? He's not just contesting the charges, he's vigorously contesting them.
"I don't just object, your Honor; I strenuously object!"
GOLDSTEIN also funded his poker activities by borrowing millions of dollars. In early 2014, GOLDSTEIN approached a California-based businessman for whom he had previously performed legal work through G&R, seeking to borrow $10 million to fund GOLDSTEIN' s gambling activities.
...
Between March 2014 and November 2016, GOLDSTEIN borrowed over $9.5 million on Note-1, most of which he lost in poker matches during that period.
Guy's got a serious problem
By January 2021, GOLDSTEIN owed over $9.89 million on Note-I ,an amount that remained outstanding throughout all of 2021. By the end of 2022, GOLDSTEIN still owed more than $8.89 million on Note-I.
Which goes interestingly with this:
GOLDSTEIN falsely understated his gambling winnings by more than $3.9 million on his 2016 Form I 040, causing the filing of a false Form I 040 and the evasion of a substantial amount of his 2016 income tax;
So he won over $4 million, but didn't use any of that to pay off his gambling loan?!?
Of course not. As a gambling obsessive, he would have assumed the appropriate thing to do was to use the $4M as a stake to gamble more, and then he could pay off the whole loan out of part of his winnings.
That's really how people in this kind of mental state think, or else they wouldn't get so deep in the first place.
In a text sent to Professional Gambler-I and Professional Gambler-2 on December 17, 2016, GOLDSTEIN calculated the "win rate" from his poker matches against the "3 targets"-Foreign Gambler-I, Foreign Gambler-2, and California Businessman-2-as follows:
"Our average win rate [was] US$660k per hour over an extended period of 77 hours," which equated to gross winnings .of $50,820,000
Very nice
GOLDSTEIN failed to report any of his winnings from the poker matches against Foreign Gambler-I and Foreign Gambler-2, as well as millions of dollars in gambling winnings from California Businessman-2, on his 2016 Form 1040.
Um, "oops, I forgot"?
I mean, if they're not lying about the text, and not lying about the tax return, that's pretty much game, set, and match, no?
As a result of the conduct described in paragraphs 25 through 35, GOLDSTEIN caused the G&R Form 1120S for the 2016 tax year to falsely overstate the expenses of G&R by $1,171,600. In addition, GOLDSTEIN falsely reported on his 2016 Form 1040 that his gambling winnings were $13,687,050 whereas, in truth and fact and as he knew, his gambling winnings were more than $17,500,000. GOLDSTEIN's under-reporting of his gambling winnings resulted in, GOLDSTEIN falsely reporting on his 2016 Form 1040 that his net gambling winnings for 2016 were $2,748,350 whereas, in truth and fact, his net gambling winnings for 2016 were more than $5,000,000.
So apparently he lost $45 million in other poker games that year?
My head is spinning
GOLDSTEIN did not tell the G&R firm manager or the Accounting Firm that the $170,000 payment to the Producer was to satisfy GOLDSTEIN's personal debt and thus was not a business expense of G&R. By causing the payment to the Producer to be sent from the G&R bank account, GOLDSTEIN caused the payment to be falsely categorized as a "Legal Fee[]" on the G&R books rather than a payment to satisfy GOLDSTEIN's personal gambling debt.
64. In addition, during 2019, GOLDSTEIN caused G&R funds totaling approximately $6,000 to be used to pay for healthcare premiums for a woman with whom GOLDSTEIN continued an intimate relationship and to whom GOLDSTEIN continued to make personal payments but who performed no work for G&R and did not qualify for health insurance under the terms of G&R's health insurance policy.
It is somewhat blowing my mind that they're worrying about $6k issues when they've got a $170k issue. Is it common for them to charge penny ante crap next to real crap?
It is strange that he bothered to commit $6,000 tax crimes when he was committing so much bigger tax crimes. It's like a drug courier speeding at 90 mph on the Interstate.
Perhaps he can convince the jury that he owes so much money in gambling debts, really he lost money on gambling, he had no net winnings, so he doesn’t owe any taxes on the gambling. If he can do that, reporting the penny ante money spent on the women as business expenses, if the government can prove it, might wind up being the only thing that sticks.
SCOTUSBLOG is a huge publice service. It probably loses money. Am I right in thinking that? Maybe it is profitable overall by enhancing the firm's reputation. Is there some other law firm or some law school that could take it over? The Coase Theorem should operate here: in whose possession would it be most valuable? What law firm's appellate practice would get the most value-added? (Not necessarily an established one; it might be more valuable as a loss leader for an entrant.)
I expect an addictionology specialist will be part of his defense team.
And this has all the elements to be fodder for top writers. Michael Lewis?