Tom Goldstein, the poker-playing and SCOTUS blog co-founding attorney who was indicted last month on 22 counts of tax evasion and fraud, has again been granted pre-trial release following an emergency court hearing.
Goldstein filed an emergency motion after a magistrate judge ruled on Monday that he had violated his bond conditions by accessing an online crypto wallet connected to his case by prosecutors, and by not reporting two wallets' existence during a pre-trial summary of assets. Over $14 million in crypto transfers through the larger (moneywise) private wallet had occurred during the same brief period of time Goldstein had been unsuccessful in changing the property used as collateral for his pretrial release.
In today's hearing (paywalled), counsel for Goldstein succeeded in creating reasonable doubt in accusations made by prosecutors that the wallet in question was owned by Goldstein and the recent transactions were connected to the dispute involving collateral, which currently remains his 5,000-sq.-ft. home in an upscale Washington DC neighborhood. Goldstein had spent the last two nights in jail following his arrest before a hearing on Monday.
'The government has made a mistake'
In Goldstein's emergency motion for release, his new counsel began as plainly as possible: "The government has made a mistake." The motion then declared as false the prosecutors' assertion that the crypto wallets were "owned" by Goldstein. Instead, his counsel argued, texts obtained by the government showed that while Goldstein may have used the accounts on occasion, the framing within that text showed that it was owned - meaning primarily controlled - by another, as-yet-unidentified person.
The motion included several appendices displaying the texts, one of which included him asking another person for the larger wallet's 43-character online address. The motion also noted that there was no evidence connecting the $14 million in recent transactions to Goldstein, and that the government's assertion was based solely on his earlier use of the account in 2023.
In a reply motion, prosecutors finally acknowledged that Goldstein might not have been the primary owner of the '935B' wallet, but had nonetheless violated the the terms of the release by not disclosing the existence of the crypto wallets in general.
In his own counter-reply, Goldstein and his lawyers argued that he was under no legal obligation to list for the pre-trial services report accounts that were owned by another party. His lawyers also protested that one of the PSR hearings didn't even occur, as prosecutors had claimed.
"Given the information that Mr. Goldstein has now presented in his Motion, the Court is no longer convinced, by clear and convincing evidence, that Mr. Goldstein violated his conditions of release," Magistrate Judge Timothy J. Sullivan wrote today. "The Court is highly suspicious that Mr. Goldstein has used cryptocurrency while on conditions of release. There is ample evidence that Mr. Goldstein has been and remains a sophisticated and frequent user of cryptocurrency for years. He has used cryptocurrency — or directed others to use it on his behalf — to pay for everything from gambling losses to luxury watches for multiple women."
In granting the motion for release, Judge Sullivan also noted, "To be clear, Mr. Goldstein has not disproven the Government’s allegations that he violated his conditions of release. The Court finds it quite possible that Mr. Goldstein is the owner of the 935B and 54E3 wallets and that he transferred the funds just as the Government alleges."
The judge also added new conditions of release. Goldstein's computer use is to be restricted and monitored, assuring he does not access other crypto accounts or have others conduct crypto transactions on his behalf.
Mystery over crypto wallets' ownership continues
To date, Goldstein has not identified for the court who is the true owner or owners of the crypto wallets cited by prosecutors, if they indeed are not his. If his assertion regarding non-ownership is true, it also greatly reduces the total of the funds sent through the wallets that were associated with his use. Prosecutors originally asserted that some $75 million in crypto had been processed through the wallets in the past couple of years. That figure may well be slashed lower as the case moves forward.
Transactions involving poker debts figure prominently in the data captured by investigators. Text submitted as court submissions identified at least two other players, who were referred to as 'Tiger' and 'Mr. T'. These appear to be different individuals than 'Professional-Gambler-1' and 'Professional-Gambler-2', who coached Goldstein at heads-up Texas hold'em and received pieces of his 2016 winnings.
The watch dealer from whom Goldstein purchased multiple high-end watches for 'multiple women' also appears to be a high-stakes player, who joked with Goldstein in one message about having tanked on a flush.
Goldstein's ownership denial and the partial acknowledgment of that possibility by prosecutors opens up other scenarios. One is that either one or both of the cited crypto wallets are owned by other prominent poker players in the international high-stakes games in which Goldstein occasionally played.
Under this scenario, Goldstein was invited to have shared access to one or more crypto wallets, which he then used on occasion for large transactions, for poker, or for other purposes. The private wallets would have then provided a quick path for funds to be moved internationally, and with more privacy than other channels. Anyone with access to the wallet could have used it for transfers.
Featured image courtesy of Sasun Bughdaryan/Unsplash
