In life and in poker, litigator Thomas Goldstein played to win. A well-respected attorney who argued cases before the Supreme Court of the United States and co-founder of the popular SCOTUSblog, Goldstein received a guilty verdict after being tried before a jury of his peers in January.
Poker, debt, and hidden income
Goldstein was a high-stakes poker player who, in the end, appeared to lose nearly everything. At the highest levels of poker in which he participated, games were played for tens of millions of dollars. Actor Tobey Maguire, also a high-stakes poker player, testified at Goldstein's trial. McGuire was not charged with any offense but testified that he had retained Goldstein to collect $7 million he won from a Texas businessman. McGuire stated that the $500,000 legal fee he paid was sent to a third party rather than to Goldstein's law firm, allowing Goldstein to divert the funds to cover personal debts instead of properly reporting the income.
For more than 10 years, Goldstein led a secret life, marked by luxury, high-stakes gambling, relationships with younger women, and expensive purchases.
IRS scrutiny and investigation
According to the Internal Revenue Service (IRS), while submitting mortgage applications, Goldstein failed to disclose millions in liabilities, taxes owed to the IRS, and more than $14 million in two promissory notes. Goldstein concealed his gambling from those closest to him, making his downfall all the more dramatic after another gambler tipped off the IRS.
An IRS Criminal Investigation special agent in charge stated, "This is precisely the type of conduct IRS Criminal Investigation and our law enforcement partners are committed to deterring. Today's conviction sends a clear message that we have the tools and resolve to protect our tax system by investigating and prosecuting those who seek to defraud the United States."
What this case illustrates
Facing sentencing in June, Goldstein has lost his fortune, marriage, reputation, career, and likely his liberty. Cases like this illustrate how undisclosed public and private conduct can significantly increase legal exposure.
For additional insight into criminal tax fraud, review our resource guide, "Understanding Tax Fraud," which outlines common indicators and types of tax fraud to help you understand whether you could be at risk for federal charges.
Concerned about criminal tax fraud?
Whether allegations involve poker winnings, employment tax fraud, or offshore shell companies, strong defense strategies rely on experience and careful analysis. If you are facing potential criminal tax exposure, speaking with a knowledgeable criminal tax attorney can help you understand your options. Call 440-250-9709 or request a consultation. We serve domestic and international clients from offices in Cleveland and Chicago.
