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Fulton County Raid & Poker, Law and Taxes · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June grosseo from Bloomberg Radio.
0:08
Speaker 2: Officials in Fulton County, Georgia are vowing to fight a
0:12
Speaker 2: recent FBI raid where agents seized more than seven hundred
0:16
Speaker 2: boxes of ballots, voter rolls, ballot images, and other election
0:20
Speaker 2: records from the twenty twenty presidential election. Jeff Duncan, who
0:25
Speaker 2: was the Republican Lieutenant governor at that time, says there
0:28
Speaker 2: were multiple audits, handcounts, and verifications of the election results.
0:33
Speaker 3: We've spent nearly six years debunking every conspiracy theory. There's
0:38
Speaker 3: been not even a single page of proof that there's
0:40
Speaker 3: been any sort of fraud involved. This is another somewhat
0:45
Speaker 3: predictable act by Donald Trump.
0:47
Speaker 2: The Justice Department sees the records as part of a
0:50
Speaker 2: criminal investigation using a grand jury subpoena. The Trump administration
0:55
Speaker 2: has been stepping up efforts to obtain sensitive voter information
0:59
Speaker 2: from states, not only names and addresses, but voter birth dates,
1:04
Speaker 2: drivers license information, and partial social security numbers. The Justice
1:09
Speaker 2: Department has sued twenty four states in Washington, d c.
1:13
Speaker 2: For refusing to turn over voter data, and federal judges
1:18
Speaker 2: have started to weigh in delivering early losses to the
1:21
Speaker 2: Trump administration in lawsuits against state leaders in California and Oregon.
1:27
Speaker 2: My guest is Rebecca Green, a professor at William and
1:30
Speaker 2: Mary Law School and director of their election law program. Rebecca,
1:35
Speaker 2: will you remind us how Fulton County, Georgia was sort
1:38
Speaker 2: of like ground zero for President Trump's unsubstantiated claims of
1:44
Speaker 2: voter fraud in the twenty twenty presidential election.
1:48
Speaker 4: Yeah, so there were several jurisdictions around the country where
1:52
Speaker 4: the president then candidate Trump sort of went hard on
1:57
Speaker 4: the theory that there had been massive fraud. So he
2:01
Speaker 4: was able to convince lots of people that those elections
2:04
Speaker 4: needed to be investigated carefully. And you know, that's sort
2:08
Speaker 4: of why those jurisdictions came under scrutiny. And so Fulton
2:12
Speaker 4: County was one of those jurisdictions. And there has really
2:15
Speaker 4: been sort of a relentless push, you know, both after
2:18
Speaker 4: the twenty twenty election and then continuing to today as
2:21
Speaker 4: we see. But you know, your listeners will remember the
2:24
Speaker 4: infamous call that President Trump made to the director of
2:28
Speaker 4: Georgia's elections Brad Rathensberger, where he asked him to find
2:32
Speaker 4: eleven thousand votes for him. So this has been ongoing,
2:34
Speaker 4: this focus on Fulton County particularly.
2:37
Speaker 2: I mean there was a machine count and two recounts
2:40
Speaker 2: that confirm the results in Fulton County, Georgia, So the
2:45
Speaker 2: due diligence was done.
2:47
Speaker 4: Yeah, So the focus on Fulton County and other jurisdictions
2:51
Speaker 4: around the country, especially in places like Arizona, resulted in
2:55
Speaker 4: sort of very careful review of all ballots, of voting machine,
3:00
Speaker 4: sort of every aspect of the election. They've been under
3:03
Speaker 4: intense scrutiny for years because of these pressures, and there's
3:07
Speaker 4: been no finding of any issues, particularly no finding of
3:12
Speaker 4: widespread fraud that would have changed the result.
3:15
Speaker 2: So the FBI seesed hundreds of boxes of ballots, voter rolls,
3:20
Speaker 2: ballot images, and other election records, and the search warrant
3:25
Speaker 2: said it was about potential voter intimidation and election interference.
3:31
Speaker 2: I mean, have you ever heard of another case where
3:32
Speaker 2: they seize that kind of evidence, they sees the actual
3:36
Speaker 2: voter rolls.
3:37
Speaker 4: Boy, you know, I can't think of an example. That
3:40
Speaker 4: doesn't mean that it hasn't happened. There certainly has been,
3:44
Speaker 4: you know, a lot of criminal investigation. You know of
3:46
Speaker 4: our elections over the course of US history, but I
3:49
Speaker 4: can't think of an instance where the federal government has
3:53
Speaker 4: seized voting equipment. I could be wrong about that, but
3:55
Speaker 4: nothing springs to mind.
3:57
Speaker 2: The election interference claims, as you describe vibe, they have
4:00
Speaker 2: already been litigated over and over again.
4:03
Speaker 4: Yes, that's correct, So I'm assuming. I mean, I'm not
4:06
Speaker 4: a criminal law expert, but I'm assuming that in order
4:09
Speaker 4: to get a warrant to seize this equipment, there must
4:12
Speaker 4: have been evidence that convinced a judge that there was
4:15
Speaker 4: a crime that hasn't been sort of settled in the
4:18
Speaker 4: courts already.
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Speaker 2: I believe there'd have to be some kind of finding
4:22
Speaker 2: of probable cause at least. What's the danger with the
4:25
Speaker 2: federal government seizing these voter rolls?
4:28
Speaker 4: Well, in the instance of the federal government obtaining this material,
4:34
Speaker 4: you know, there are layers of concern that people have voiced,
4:37
Speaker 4: so there is lots of concern about voter privacy. For example,
4:41
Speaker 4: there's concern about this being sort of a precursor to
4:45
Speaker 4: future efforts to take equipment out of state custody, equipment
4:50
Speaker 4: and ballots out of state custody. You know, in future elections.
4:53
Speaker 4: So there's all kinds of concerns that have been raised
4:56
Speaker 4: about this activity as being sort of more than a
4:58
Speaker 4: run of the mill sort of criminal investigation.
5:01
Speaker 2: So Tulsey Gabbert, director of National Intelligence, was there and
5:07
Speaker 2: she's been in charge of investigation into election integrity, so
5:13
Speaker 2: called election integrity, and at one point Trump asked her
5:17
Speaker 2: in a cabinet meeting whether she had found evidence in
5:19
Speaker 2: burn bags of how corrupt the twenty twenty election was,
5:23
Speaker 2: and she said, we're finding documents literally tucked away in
5:27
Speaker 2: the back of safes and random offices in these bags
5:30
Speaker 2: and in other areas. It sounds sort of like, you know,
5:33
Speaker 2: Rudy Giuliani's talking about, you know, votes being found in suitcases.
5:38
Speaker 4: Yeah, there's been lots of rhetoric, but so far in
5:41
Speaker 4: courts of law, where you know, judges have required plaintiffs
5:46
Speaker 4: to bring that evidence forward, there hasn't been any credible
5:49
Speaker 4: evidence so far, you know, brought into courts. So you know,
5:53
Speaker 4: you can scream from the rooftop that you know there's
5:56
Speaker 4: been fraud, and you can get on the airwaves and
5:59
Speaker 4: make all the allegations that you want, but ultimately it's
6:01
Speaker 4: courts of law that have to review that type of evidence.
6:04
Speaker 2: And the Justice Department is looking to get voter rolls
6:10
Speaker 2: from something like half the states that's in litigation. They
6:14
Speaker 2: say they want the voter roles to protect the election integrity.
6:17
Speaker 2: I mean, what would be a reason for them wanting
6:19
Speaker 2: the voter rolls from every state?
6:21
Speaker 4: Well, I suspect that there's an effort to determine whether
6:25
Speaker 4: there are people on the voter roles who shouldn't be there,
6:29
Speaker 4: and to sort of leverage the power of the federal
6:31
Speaker 4: government to examine that material. But I think it's important
6:35
Speaker 4: to note that federal law requires that states actively vet
6:40
Speaker 4: their voter roles. There are very sort of careful processes
6:44
Speaker 4: that every state is required to go through to make
6:46
Speaker 4: sure that ineligible voters are not on their voter rolls,
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Speaker 4: and to clean them up periodically to make sure that
6:52
Speaker 4: you know, as people move, as people pass away, that
6:55
Speaker 4: the voter roles reflect that, you know, to identify double voting,
6:59
Speaker 4: all these kinds of things. So states already go through
7:01
Speaker 4: very rigorous procedures to make sure that their voter roles
7:04
Speaker 4: are as accurate as possible. And I think it's worth saying,
7:06
Speaker 4: you know, obviously that's a very herculean task because you know,
7:10
Speaker 4: Americans move quite frequently. You know, there are constants sort
7:15
Speaker 4: of turnover in terms of who should be and who
7:17
Speaker 4: shouldn't be on the roles.
7:18
Speaker 1: So it's it's.
7:19
Speaker 4: An ongoing effort, but that's the job of state election
7:23
Speaker 4: administrators and they take it very seriously.
7:25
Speaker 2: Explain state versus federal as far as their roles in elections.
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Speaker 4: Sure, so, Article one, section four of the United States
7:34
Speaker 4: Constitution grants states the authority to make rules involving the time, place,
7:40
Speaker 4: and manner of elections. So that's a very clear federal
7:45
Speaker 4: constitutional grant of power to the states. There is a
7:49
Speaker 4: next phrase right after that that says that Congress can
7:52
Speaker 4: make rules governing the time, place, or manner of elections also,
7:56
Speaker 4: so there's this sort of way that the federal government
7:59
Speaker 4: can sort of takeover elections if it wants. But the
8:03
Speaker 4: grant of power to the federal government is to Congress,
8:06
Speaker 4: not to the executive And so the feeling is that
8:10
Speaker 4: unless Congress acts to take the power away from states
8:13
Speaker 4: to manage their voter roles, that the executive branch has
8:18
Speaker 4: no role in doing so.
8:20
Speaker 2: Yesterday, President Trump suggested on a conservative podcast that Republican
8:25
Speaker 2: state officials should take over and nationalize elections in fifteen
8:31
Speaker 2: states to protect the party from being voted out of office.
8:35
Speaker 2: That would violate the Constitution, wouldn't it.
8:37
Speaker 4: Yeah, So, as I just described, the US Constitution delegates
8:42
Speaker 4: to states power over elections, so there would be no
8:45
Speaker 4: ability for a political party or sort of by executive command,
8:50
Speaker 4: for the federal takeover of elections. So that's sort of
8:54
Speaker 4: a first point, and I think a second point that's
8:56
Speaker 4: really important to make here is to underscore that there
9:00
Speaker 4: are tons of protections within state law that ensure that partisans,
9:06
Speaker 4: that is, Republicans and Democrats, members of the two major parties,
9:10
Speaker 4: are present and able to sort of weigh in and
9:14
Speaker 4: hold accountable elections at every level. So this is from
9:18
Speaker 4: boards of elections that are populated with Republicans and Democrats
9:22
Speaker 4: all the way down to partisan poll observers where Republicans
9:25
Speaker 4: and Democrats sort of are authorized to watch every aspect
9:29
Speaker 4: of elections, from authorizing voting machines right up until you're
9:33
Speaker 4: counting the ballots, and so there already is a huge
9:37
Speaker 4: amount of what I call adversarial oversight of the election
9:41
Speaker 4: process to make sure that one party is not able
9:45
Speaker 4: to sort of do anything fraudulent or in secret without
9:48
Speaker 4: the other party sort of being privy and present. So
9:51
Speaker 4: those kinds of adversarial protections are very much part of
9:55
Speaker 4: our election process and should provide some comfort for anyone
9:59
Speaker 4: who's concerned about either Republicans or Democrats sort of taking over.
10:04
Speaker 4: In other words, elections are bipartisan efforts at every level.
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Speaker 2: And he is repeating the claim that immigrants are voting illegally.
10:13
Speaker 2: Is that prevalent? Does it happen?
10:16
Speaker 4: Oh, it certainly happens in the sense that some when
10:19
Speaker 4: I've seen sort of reports on this, it's usually somebody
10:22
Speaker 4: who mistakenly believes that they are allowed to vote. So,
10:25
Speaker 4: for example, they get a driver's license and they're asked,
10:28
Speaker 4: do you want to register to vote? They don't understand
10:31
Speaker 4: what that means. They mistakenly get put on the roles
10:33
Speaker 4: of this kind of thing. But I think, you know,
10:35
Speaker 4: common sense dictates the reality that if you're in this
10:40
Speaker 4: country illegally, the last thing you want to do is,
10:44
Speaker 4: you know, do something illegal that is registered to vote
10:46
Speaker 4: and sort of push yourself out there. I mean, people
10:49
Speaker 4: who in this country who are here illegally, you know,
10:52
Speaker 4: are are not. I think it's safe to say, you know,
10:55
Speaker 4: coming out in droves to register themselves with state governments.
10:59
Speaker 4: So I think, you know, the idea that there are
11:01
Speaker 4: massive numbers of non citizens voting in our elections sort
11:05
Speaker 4: of defies credulity for that reason.
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Speaker 2: Thanks so much for an interesting conversation, Rebecca. That's Professor
11:11
Speaker 2: Rebecca Green of William and Mary Law School. Coming up
11:15
Speaker 2: next on the Bloomberg Law Show. Tom Goldstein, once a
11:18
Speaker 2: legal superstar, is on trial for tax evasion and his
11:23
Speaker 2: double life as a high stakes poker player is at
11:27
Speaker 2: the heart of the charges. I'm June Grosso and you're
11:30
Speaker 2: listening to Bloomberg. Tom Goldstein was known as a superstar lawyer,
11:37
Speaker 2: in fact, a superstar Supreme Court litigator who argued forty
11:42
Speaker 2: five cases before the High Court. He also co founded
11:46
Speaker 2: the most prominent blog covering the court, appropriately called Scotis Blog.
11:51
Speaker 2: That's why it came as a shock to the legal
11:54
Speaker 2: establishment when Goldstein was indicted last January for scheming to
11:59
Speaker 2: evade ten axes and using millions of dollars from his
12:02
Speaker 2: law firm to cover gambling debts. According to the indictment,
12:07
Speaker 2: Goldstein was living a double life with a side career
12:10
Speaker 2: as a high stakes poker player, very high stakes, winning
12:14
Speaker 2: more than fifty million dollars in a series of poker
12:18
Speaker 2: matches in twenty sixteen to fund a lavish lifestyle. Now
12:22
Speaker 2: Goldstein is putting his cards on the table in court,
12:26
Speaker 2: where again the stakes are very high. He's facing prison
12:30
Speaker 2: time if convicted. My guest is Holly Barker, a senior
12:34
Speaker 2: reporter for Bloomberg Law who's covering the Goldstein trial. So
12:38
Speaker 2: Holly tell us about Tom Goldstein.
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Speaker 1: So Tom Goldstein, I think is best described as a
12:44
Speaker 1: legal nerds for celebrity. He co founded scotislog dot com,
12:48
Speaker 1: which was this groundbreaking online resource on the Supreme Court
12:51
Speaker 1: back in two thousand and two. It was a big deal,
12:54
Speaker 1: particularly at the time because the Supreme Court's website, if
12:57
Speaker 1: it had one, was an It's nacency and it just
12:59
Speaker 1: wasn't terribly it accessible. He also cultivated the career as
13:02
Speaker 1: a really high profile Supreme Court advocate. He argued dozens
13:05
Speaker 1: of cases before the High Court. And what makes that
13:08
Speaker 1: even more impress is that, unlike many of those who
13:11
Speaker 1: can make the same claim, he didn't go to an
13:13
Speaker 1: elite law school or Cork for a justice. He instead
13:17
Speaker 1: hustle his way into the career by identifying circuit slates
13:20
Speaker 1: and cool calling parties to offer his representations. So he's
13:24
Speaker 1: sort of this unlikely Supreme Court star and is very
13:28
Speaker 1: well known in legal circles, especially in Washington, DC, and.
13:32
Speaker 2: Talking about unlikely tell us about the reaction when he
13:37
Speaker 2: was indicted.
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Speaker 1: People were shocked. He was indicted in January twenty twenty five,
13:42
Speaker 1: and he was initially facing twenty two counts, mostly tax charges.
13:46
Speaker 1: The government moved to dismiss six of them on the
13:49
Speaker 1: ease of trial. So now he's facing one count of
13:52
Speaker 1: taxivation for twenty sixteen, eight counts of aiding and assisting
13:57
Speaker 1: in a preparation of false tax returns, and that's twenty
14:00
Speaker 1: seventeen through twenty twenty one, four counts of will full
14:03
Speaker 1: failure to pay taxes for twenty seventeen, twenty nineteen, twenty
14:06
Speaker 1: twenty and twenty twenty one, and three counts of making
14:10
Speaker 1: a false statement on alone application. So for the tax
14:13
Speaker 1: eVision count, the government's advancing eight theories of alleged quote
14:18
Speaker 1: unquote active evasions. They include using his law firm funds
14:22
Speaker 1: to pay personal gambling debts, so mischaracterizing personal expenses is
14:26
Speaker 1: business expenses. Providing false and complete information to his accounting firm,
14:32
Speaker 1: making false and misleading statements to an IRS revenue officer,
14:35
Speaker 1: transferring at least nine hundred and sixty thousand impersonal funds
14:39
Speaker 1: to his firm's trust accounts to shield the funds from
14:41
Speaker 1: IRS collection allegedly, and to use foreign individuals and bank
14:44
Speaker 1: accounts to receive income. To the fraudulent tax return charges,
14:48
Speaker 1: those are based on particular line items on his tax
14:51
Speaker 1: returns of prosecutors or pay false like close receives other
14:54
Speaker 1: income so forth, and the willful failure to pay counts
14:57
Speaker 1: are based on his alleged failure to pay his taxes
15:00
Speaker 1: on the date that they would do. So he filed
15:02
Speaker 1: a tax atturn, got an extension, eventually paid the taxes
15:06
Speaker 1: and penalties and interest, but the government theories that he
15:09
Speaker 1: had the money available to pay the taxes when they
15:11
Speaker 1: were due, but instead elected to fund this ultra high
15:15
Speaker 1: stakes gambling and ultra luxury lifestyle. And I think that's
15:19
Speaker 1: sort of where the real shock in the public came
15:21
Speaker 1: was sort of you know, there had been some media's
15:25
Speaker 1: coverage of gold scenes gambling in the past people were
15:29
Speaker 1: sort of aware of it, but I don't think that
15:32
Speaker 1: the public sort of had a sense of how serious
15:34
Speaker 1: of the gambler he was, or that he was playing
15:37
Speaker 1: multimillion dollar hands. You know. There were also allegations that
15:41
Speaker 1: his defense team was able to get excluded about Paramore's
15:46
Speaker 1: women he was having relationships with that he allegedly had
15:50
Speaker 1: on the firm's payroll. But all of that got cosst
15:53
Speaker 1: you know. I think it was shocking to see such
15:56
Speaker 1: a high profile sort of legal hero be us of
16:00
Speaker 1: such serious crimes down These are allegations, right, but it's
16:03
Speaker 1: quite a fall from grace even to be indicted on
16:06
Speaker 1: charges like that. So people were shocked.
16:08
Speaker 2: The amount of money on the table in these poker
16:11
Speaker 2: games is sort of astonishing, and the people that he
16:15
Speaker 2: was playing with, high rollers and movie stars like Toby maguire,
16:20
Speaker 2: very far from the legal world.
16:22
Speaker 1: It's mind bobbling. He really was sort of living a
16:25
Speaker 1: parallel life.
16:27
Speaker 2: During the opening statements, the prosecution and defense painted two
16:32
Speaker 2: very different pictures, basically two stories of what the case
16:37
Speaker 2: is about.
16:39
Speaker 1: That's right, so the government is painting a picture of
16:44
Speaker 1: this hunning, smart, charming, very capable. Supreme Court lawyer who
16:52
Speaker 1: used his wiles to try to win tons of money gambling,
16:57
Speaker 1: wasn't always very good at it, and you know, was
17:01
Speaker 1: intentionally trying to get around his taxes in order to
17:04
Speaker 1: keep funding this lifestyle. That's the less of the government's case.
17:08
Speaker 1: So his defense, and to be clear, he hasn't put
17:10
Speaker 1: on this case set. It's still the government's case in chief. Still,
17:13
Speaker 1: he teed up his defenses at opening and has managed
17:17
Speaker 1: to pease some of it out and cross examinations. So
17:20
Speaker 1: the themes and the defenses include one a botched and
17:24
Speaker 1: incomplete government investigation. So he claims this whole investigation was
17:28
Speaker 1: driven by prosecutors and agents who were afflicted by tunnel vision.
17:32
Speaker 1: They sort of decided he was guilty and were only
17:34
Speaker 1: hunting for facts and evidence that substantiated that view. The
17:38
Speaker 1: government keeps claiming that he failed to report significant gambling winnings,
17:42
Speaker 1: but the defense is shown through a cross examination. But
17:45
Speaker 1: he didn't always keep what he won and was often
17:48
Speaker 1: playing with other people's money. You know, Tom Goldstein is
17:51
Speaker 1: not a billionaire. He was playing billionaires. In order to
17:54
Speaker 1: do that, he often had financial backers, like investors who
17:58
Speaker 1: had stakes in the game. So you know, he may
18:01
Speaker 1: have won fifty million dollars playing heads up poker, but
18:05
Speaker 1: that doesn't mean he took home fifty million dollars. And
18:09
Speaker 1: the government has a picture and they stipulated to sort
18:12
Speaker 1: of what some of those gambling wins and losses were,
18:16
Speaker 1: but they've done a pretty good job of suggesting that
18:19
Speaker 1: the government just doesn't have a complete picture, And in
18:21
Speaker 1: mischaracterized transactions and allegedly false entries on tax returns, he
18:26
Speaker 1: basically claims that he was relying on his firm managers
18:29
Speaker 1: and the expertise of outside accountants and tax repairers. You know,
18:32
Speaker 1: they weren't asking the right questions. They were making assumptions
18:35
Speaker 1: and they shouldn't have and so forth. He's also been
18:37
Speaker 1: playing up the complexity of the tax laws and reporting
18:41
Speaker 1: gambling income in particular, and challenging the element of wilfulness,
18:45
Speaker 1: which is a heightened intent standard that's in play for
18:48
Speaker 1: tax charges. So, you know, while the prosecution has made
18:50
Speaker 1: a lot of gold seam smarts and status as an
18:53
Speaker 1: elite lawyer, again, the defense has done a good job
18:55
Speaker 1: of eliciting testimony to supporting his claim and the theme
18:59
Speaker 1: that he just wasn't teamed into the firm finances like, yes,
19:03
Speaker 1: it is very detailed oriented when it came to a
19:05
Speaker 1: practice of law, but much less so in management of it.
19:09
Speaker 1: And then finally for the willful to pay charges. The
19:11
Speaker 1: trust of this argument is what like, I filed banker turned,
19:14
Speaker 1: I got the necessary extensions, I entered into a payment plan,
19:18
Speaker 1: Like how was I supposed to know? I could put
19:19
Speaker 1: a jail for this. The idea is, you know, lots
19:22
Speaker 1: of people don't pay their taxes on time and they
19:24
Speaker 1: don't get indicted for it, you know, instead of handled
19:26
Speaker 1: with interest and penalties.
19:28
Speaker 2: That's an argument that I think would appeal to a
19:30
Speaker 2: lot of people, especially those who may have filed late
19:33
Speaker 2: once or twice. And tell us about the IRS agent
19:37
Speaker 2: who had audited Goldstein in twenty twelve, who testified that
19:42
Speaker 2: he told Goldstein's then accountant and power of attorney that
19:47
Speaker 2: he needed to keep better records of his gambling wins
19:50
Speaker 2: and losses.
19:52
Speaker 1: That's right. So they've had a couple of IRS agents
19:55
Speaker 1: revenue agents testify, and one of them testified about an
19:59
Speaker 1: audit that predates all of this, and you know, at
20:02
Speaker 1: the end of that audit, which by the way, he
20:05
Speaker 1: wound up getting a refund, so the IRS paid Heen
20:07
Speaker 1: money out of the audit. But you know, he yet
20:10
Speaker 1: a proxy dealing with the IRS directly. But the RS
20:13
Speaker 1: agent said that he told his proxy, the accountant as
20:16
Speaker 1: powever attorney, that is, that he needed to keep more
20:18
Speaker 1: robust gambling records, he needed to keep a more complete ledger.
20:22
Speaker 1: Was basically the th rest of it. But you know,
20:24
Speaker 1: the defense made the point, you know, the RS agent
20:27
Speaker 1: didn't pay that directly to gold Scene, and when the
20:29
Speaker 1: accountant testified, he's like, you know, I'm assuming that I
20:32
Speaker 1: delayed that to gold Scene, but he doesn't have like
20:35
Speaker 1: a specific memory of it. He's just assuming he did
20:37
Speaker 1: because that's what he did. As a matter of course.
20:40
Speaker 1: The other thing that he said was basically that you know,
20:44
Speaker 1: gold Scene terminated him at the end of that audit,
20:47
Speaker 1: and it was basically gold Scene wasn't happy that he'd
20:50
Speaker 1: wound up in an audit and was upset with him
20:52
Speaker 1: the accountant for not having asked more follow up questions
20:56
Speaker 1: because gold Stein had mentioned gambling to him, So that
21:00
Speaker 1: sort of helped his case or his argument that look
21:02
Speaker 1: like I was relying on outside experts.
21:05
Speaker 2: If the theory is that he wasn't a great poker player,
21:10
Speaker 2: then why were people investing in his poker playing?
21:15
Speaker 1: Good question? So apparently he was pretty good at heads
21:18
Speaker 1: up poker, not as good at being it's called a
21:22
Speaker 1: ring match. So the head up game was two players,
21:24
Speaker 1: just one on one ring game? Is there more than two?
21:27
Speaker 1: I guess he was better at one than the other,
21:30
Speaker 1: and good enough that people at least in the heads
21:32
Speaker 1: up games were willing to invest in them. And you know,
21:34
Speaker 1: and he won a lot. He wound up it looks
21:37
Speaker 1: like perhaps losing more often than in years after twenty sixteen,
21:41
Speaker 1: but twenty sixteen was definitely a big year for him.
21:44
Speaker 1: Evidence a trial shows that he won around twenty six
21:47
Speaker 1: million if he was twenty six twenty four million from
21:50
Speaker 1: outscorts his billionaire. So he was good enough. You know.
21:56
Speaker 1: He was described by professional poker players as I think
21:59
Speaker 1: the word aggressed came up more than once, Like multiple
22:02
Speaker 1: people described him his aggressive, and another witness described him
22:05
Speaker 1: as sort of a crazy man. And you know, I
22:07
Speaker 1: guess maybe that works sometimes and sometimes it doesn't.
22:11
Speaker 2: Spider Man star Toby McGuire took the stand, tell us
22:16
Speaker 2: how he fit in here?
22:18
Speaker 1: So Toby McGuire hired Goldstein to help him recover part
22:24
Speaker 1: of a very significant gambling that from Andy Beal, who
22:29
Speaker 1: is a Texas billionaire. Toby had played them won a
22:32
Speaker 1: bunch of money. Mister Bial didn't want to pay up,
22:38
Speaker 1: so McGuire hires Goldstein to help him get his money back,
22:44
Speaker 1: and ultimately Goldstein gets a successful result for him, and
22:49
Speaker 1: you know, deal pays up everything that he owes and
22:52
Speaker 1: then Goldstein gets a five hundred thousand dollars fee.
22:55
Speaker 2: Hold that thought.
22:56
Speaker 1: Holly.
22:57
Speaker 2: Coming up next on the Bloomberg Law Show, I'll into
23:00
Speaker 2: this conversation with Holly Barker. We'll find out more about
23:04
Speaker 2: Toby McGuire's testimony and the jury's reaction to having a
23:08
Speaker 2: movie star in the courtroom. We've been talking about the
23:13
Speaker 2: trial of Tom Goldstein, once a legal superstar at the
23:17
Speaker 2: Supreme Court who led a double life as a high
23:20
Speaker 2: stakes poker player with a lavish lifestyle. The government alleges
23:25
Speaker 2: that Goldstein deliberately failed to tell his accountants about twenty
23:29
Speaker 2: six million dollars in poker winnings and repeatedly opted not
23:33
Speaker 2: to pay his taxes on time, while the defense says
23:36
Speaker 2: the evidence will show that Goldstein did tell his accountants
23:40
Speaker 2: about the winnings and that the lifestyle evidence is just
23:43
Speaker 2: a distraction. The trial is offering a colorful glimpse into
23:48
Speaker 2: the world of ultra high stakes poker. Spider Man star
23:52
Speaker 2: Toby McGuire testified. Knowing Goldstein from Poker Circles. Watching all
23:57
Speaker 2: the testimony is Holly Barker Bloomberg Laws senior reporter Holly
24:02
Speaker 2: tell us about Toby maguire's testimony.
24:05
Speaker 1: So Toby McGuire was called to testify and connection with
24:10
Speaker 1: a legal fee that he was owed to Goldstein, but
24:15
Speaker 1: that Goldstein asked him to instead wire to a real
24:19
Speaker 1: estate model named Bob Sasai. Goldstein had played Bob Sofy
24:23
Speaker 1: and lost a significant amount of money and actually had
24:26
Speaker 1: a payment plan, and he had McGuire you direct his
24:30
Speaker 1: five hundred thousand dollars fee to Sufly in order to
24:34
Speaker 1: satisfy part of that poker debt. And the idea was
24:37
Speaker 1: that that income should have been reported as income to
24:43
Speaker 1: Goldstein's law firm. But by having McGuire send this directly
24:48
Speaker 1: to a poker buddy he had money to, he sort
24:51
Speaker 1: of avoided having to report it his income. And that
24:54
Speaker 1: was the gist of it. And the matter that Goldstein
24:57
Speaker 1: was representing in and McGuire and gold Sea met one
25:00
Speaker 1: another in poker circles, and maguire hired Goldstein because he
25:04
Speaker 1: wanted to collect a seven point eight billion dollar gambling
25:07
Speaker 1: that from Tessa's billionaire Andy deal. And Goldstein did it
25:11
Speaker 1: and was successful in collecting that, And was.
25:14
Speaker 2: The jury sort of starstruck when McGuire testified.
25:19
Speaker 1: Not at all, or at least if they were, they
25:21
Speaker 1: didn't show it. They treated him just like they treated
25:25
Speaker 1: every other witness, these same level of engagement, same expressions
25:28
Speaker 1: on their face. It wasn't quite as exciting as I
25:31
Speaker 1: think people may have expected it would be. You know,
25:34
Speaker 1: he wasn't on the stand for very long. Is testimony
25:37
Speaker 1: was fairly clean. You know, he looked at ease. He
25:41
Speaker 1: was pretty smiley. I think a lot of witnesses and
25:44
Speaker 1: they get on the stand and they do that if
25:45
Speaker 1: they get a little bit nervous.
25:46
Speaker 2: He is or was a huge poker player, right, millions
25:50
Speaker 2: and millions and millions of dollars.
25:52
Speaker 1: When he left that courtroom, I was left with the
25:54
Speaker 1: impression that he might make more money gambling that he
25:58
Speaker 1: makes playing Spider Man.
26:00
Speaker 5: So he's still gambling's complected.
26:02
Speaker 2: Tell us about this bag of cash that prosecutors wanted
26:07
Speaker 2: to introduce, but the judge would not let them.
26:11
Speaker 1: Yeah, the allegation is in the inviictment and there's been
26:13
Speaker 1: lots of testimony about it. Gold Steine brought close to
26:17
Speaker 1: a million dollars in cash when he was returning from
26:21
Speaker 1: a trip from Asia and he was going through Dollars
26:23
Speaker 1: International Airport, and prosecutors saying that when he was talking
26:28
Speaker 1: to the agent, he said, you know, oh, the money
26:32
Speaker 1: was gambling and this is to a Customs and Border patrologience.
26:36
Speaker 1: But then when he talked to an IRS agent later
26:39
Speaker 1: he said it was alone. But then when he was
26:41
Speaker 1: talking to a firm manager, he said it was legal fees.
26:46
Speaker 1: So they're basically saying that this was income that he
26:49
Speaker 1: didn't properly characterize, and they had hoped this wasn't before
26:54
Speaker 1: the jury. This is, you know, a discussion that was
26:57
Speaker 1: held outside of the presence of the jury, but they
26:59
Speaker 1: wanted to bring like a representative bag of cash, and
27:05
Speaker 1: during the Customs and Border patrol agents testimony, and the
27:10
Speaker 1: judge just said that, you know, we don't see what
27:12
Speaker 1: the proporate value that is. It's not even the same
27:14
Speaker 1: bag of cash. It's not even the same bag. I mean,
27:17
Speaker 1: I think it's it's pretty clear that the prosecution wanted
27:20
Speaker 1: it for effect, but it did not get it.
27:23
Speaker 2: And how do you even bring that much money through customs?
27:27
Speaker 1: Apparently it's a thing. They have cash counters and you
27:30
Speaker 1: spend a little time and the whole thing.
27:33
Speaker 5: Really, I mean, how is the prosecution's case going. It
27:36
Speaker 5: seems like the defense has been able to make some
27:38
Speaker 5: of their points through cross examination.
27:41
Speaker 1: That's a really good question. I'm still frankly trying to
27:44
Speaker 1: digest the case in chief the prosecution as a goal
27:48
Speaker 1: of resting on Thursday, I think it's much more likely
27:51
Speaker 1: that Eric's case and chief goes into Friday. They've had
27:55
Speaker 1: twenty three witnesses to date. You know, we don't have
27:58
Speaker 1: the whole sense of who the remaining witness is are,
28:00
Speaker 1: but we know at least two of them are going
28:02
Speaker 1: to be two of the outside accountants, and I think
28:05
Speaker 1: their testimony is going to be a very big deal
28:08
Speaker 1: because they're going to be able to speak sort of
28:09
Speaker 1: directly to what their interactions with gold Stein were, sort
28:13
Speaker 1: of around tax preparation. But to the answer your question,
28:17
Speaker 1: the jurors, I think, are going to have a really
28:18
Speaker 1: difficult time personal of this. And I think it's less
28:22
Speaker 1: about the facts of the transaction, like, you know, did
28:26
Speaker 1: these transactions occur where they mischaracterize that sort of thing,
28:29
Speaker 1: and more about what was in Goldstein's mind, And that
28:34
Speaker 1: is really what the jurors are going to have to
28:36
Speaker 1: contend with. And I do think that the prosecution has
28:39
Speaker 1: done a very good job of, you know, keasing out
28:44
Speaker 1: spaces for doubt wherever they are. I think the government
28:48
Speaker 1: spaid a lot of time investigating this case, but I
28:50
Speaker 1: think the defense is really going to hold them to
28:52
Speaker 1: their burden.
28:53
Speaker 5: They have to show that he had intent.
28:56
Speaker 1: Yes, so there are mortgage fraud charges those are a
29:00
Speaker 1: more straightforward, but the tax charges require a heightened intense
29:05
Speaker 1: standard that the government has to prove that he intentionally
29:09
Speaker 1: violated a known legal duty. So mistake and negligence is
29:13
Speaker 1: not enough to carry the day on tax charges. So
29:16
Speaker 1: if the defense can plant enough of the seed of
29:19
Speaker 1: doubt about whether or not gold Stein intended to screw
29:23
Speaker 1: this stuff up, you know, one of the things the
29:25
Speaker 1: defense said in their opening was, this is a handful
29:28
Speaker 1: of mischaracterized transactions in a sea of transactions over you know,
29:33
Speaker 1: many years, and to sort of cherry to pick those
29:37
Speaker 1: and conclude that he was up to no good as
29:39
Speaker 1: a reach. That's sort of another scene of their defense,
29:43
Speaker 1: you know. I don't think the prosecutors that have this
29:45
Speaker 1: in the back, you know, notwithstanding a speaking indictment. So
29:49
Speaker 1: we'll see.
29:50
Speaker 5: Finally, I mean, is there any hint as to whether
29:52
Speaker 5: Goldsteam might take the stand?
29:54
Speaker 1: I honestly have.
29:57
Speaker 5: Spoken, but cross examination for everyone, yeah.
30:01
Speaker 1: You know, and I'm sure part of him is dying too.
30:03
Speaker 1: I would imagine a lot of dependents want to be heard,
30:06
Speaker 1: but it's that risk of cross examination that keeps them
30:08
Speaker 1: from doing it. I'm sure that the jurors would like
30:10
Speaker 1: to hear from him. I think in these cases, these
30:13
Speaker 1: cases that turn so heavily on what was in a
30:17
Speaker 1: defendant's mind, I think jurors are always hungry to hear
30:20
Speaker 1: from them. So we'll see, well, you.
30:22
Speaker 2: Know, what they say when the defendant takes the stand.
30:24
Speaker 2: Then everything becomes about the defendant's testimony and whether the
30:29
Speaker 2: jury believes him or her. So high stakes there as well.
30:34
Speaker 2: Thanks so much, Holly, that's Bloomberg Law Senior reporter, Holly Barker,
30:39
Speaker 2: and that's it for this edition of The Bloomberg Law Show.
30:41
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30:44
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30:48
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30:56
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31:01
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31:06
Speaker 4: Mhmm,