High-Stakes Poker Lawyer Tom Goldstein Out of Custody But Can't Use Crypto
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A federal judge ordered the release of Tom Goldstein from custody in Maryland after the prominent attorney was arrested this week for allegedly violating his bail.
Goldstein was arrested Monday after investigators said they discovered undisclosed cryptocurrency wallets that sent and received millions in transactions this past week. Goldstein, a top Supreme Court of the United States and founder of the popular SCOTUSblog, denied ownership of the wallets and said the government "made a mistake."
Today, Magistrate Judge Timothy J. Sullivan ordered Goldstein's release after reviewing evidence submitted by Goldstein that "casts sufficient doubt" that he owned the two crypto wallets.
Sullivan had previously ordered Goldstein's arrest after finding "clear and convincing evidence" that he violated pretrial release conditions and posed a flight risk.
"Given the information that Mr. Goldstein has now presented ... the Court is no longer convinced, by clear and convincing evidence, that Mr. Goldstein violated his conditions of release," Judge Sullivan wrote on Thursday.
Goldstein's ownership of the crypto wallets was further called into question when prosecutors saw $2 million moved from one of the wallets earlier this week while Goldstein was in custody, The Washington Post reported.
"If he owns the wallet, how is he doing crypto transfers from a jail cell?" Judge Sullivan said in court on Thursday, according to the Post. Assistant US Attorney Patrick Kibbe agreed in court it "changes the picture."
However, Judge Sullivan noted in his ruling that 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 ... If the preponderance of the evidence standard applied ... Mr. Goldstein would remain detained," wrote Sullivan.
Sullivan added the Court was "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 wrote. "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."
Goldstein Denies Ownership of Crypto Wallets
Judge Modifies Goldstein's Release Terms
Judge Sullivan revised Goldstein's conditions of release, requiring him to disclose all financial accounts and crypto wallets and stating that he “shall not access, receive, send and/or transfer any cryptocurrency.”
"Given Mr. Goldstein’s extensive past use of cryptocurrency, the Court finds it likely that Mr. Goldstein has access to funds that have yet to be identified, and which he might use to flee from prosecution in this case," he wrote.
Goldstein was also ordered to “Refrain from the use of computer systems, Internet-capable devices and/or similar electronic devices at any location … without the prior written approval of the U.S. Probation and Pretrial Services Office monitoring of compliance with this condition.”
His previous release conditions also apply, including being prohibited from playing poker while awaiting trial.
Goldstein was charged last month in a 22-count indictment related to high-stakes poker winnings and losses. He is accused of tax evasion, preparing false and fraudulent tax returns, and making false statements on mortgage applications.
He was being held without bail at Maryland's maximum-security Chesapeake Detention Facility in Baltimore.
Goldstein Loses Fight to Change Collateral
In a later court filing on Thursday, Goldstein again requested to switch collateral to avoid putting his Washington, DC, home at risk.
"Goldstein intends to use the equity in the house to fund his defense in this case," wrote attorneys Jonathan I. Kravis and Adeel Mohammadi. "The government has employed multiple tools to make it impossible for him to do so."
Goldstein repeated his claim that he has a "negative net worth" of $3.3 million, which prosecutors pushed back on earlier this month, noting that he had a bank account balance of $250,000 and was paying monthly expenses that included $5,000 a month for a housekeeper, $8,000 a month for a personal assistant and $20,000 for an apartment in Dallas.
"When comparing these vast sums of money to the financial assets of the average person in this District, Defendant’s claim that he does not have money to pay for counsel rings hollow," prosecutors wrote on Feb. 7.
Goldstein's attorneys rebutted on Thursday by saying his combined bank accounts showing a balance of $393,500 was "not nearly sufficient to fund a defense in this complex case and still leave Mr. Goldstein a nominal amount for living expenses."
On Friday, Judge Lydia Kay Griggsby denied Goldstein's request to substitute collateral without prejudice, meaning Goldstein could re-file his request.
*Lead image courtesy Legaleagle22/WikiCommons
