REFILE-Law firm chief recounts ‘crazy’ bet on Washington lawyer Goldstein’s poker play

By Mike Scarcella

WASHINGTON, Jan 21 (Reuters) - Two law firm leaders testified on Wednesday at the U.S. criminal tax trial of Tom Goldstein, telling jurors about the chances they took — or avoided — to invest in the former U.S. Supreme Court lawyer’s side career as a high-stakes card player.

Paul Napoli of plaintiffs' firm Napoli Shkolnik said he and a law partner in 2017 invested $500,000 of their firm's money to back Goldstein in poker matches. His firm’s chief financial officer thought the move was “crazy,” Napoli testified, but he said the firm eventually took in $90,000 in profit.

The other lawyer, Darren Robbins of class action firm Robbins Geller Rudman & Dowd, said Goldstein also presented him a chance to invest in his games. Robbins said he declined the opportunity.

The testimony came on the third day of trial in the federal court in Greenbelt, Maryland, where Goldstein was indicted last year for allegedly failing to report millions of dollars he won in poker games, lying on loan documents and making improper payments through his law firm Goldstein & Russell.

Goldstein, who argued more than 40 cases before the Supreme Court before retiring in 2023, pleaded not guilty. He has maintained he acted in good faith at all times, relying on his accountants and law office managers for tax and financial matters.

Prosecutors have portrayed Goldstein as a “high roller” who deceived those around him to help fuel multimillion-dollar poker matches around the world.

Napoli said his firm’s investment made sense since he knew Goldstein for years and considered him a skilled and intelligent person.

“We thought it would be a fun, interesting investment,” Napoli said. He added: “He had told us that he made tens of millions of dollars and was betting high stakes, big pots of money.”

Napoli recalled making a months-long effort to recover the $500,000 in 2017, as his firm sought a cash infusion for litigation. He said he was facing pressure from the firm’s CFO to get the money back.

Goldstein was being a “jerk” about refunding the cash, Napoli told jurors. He said he was “suspicious” about why he couldn’t quickly get back the firm’s investment.

Napoli said the firm ultimately received all the money except for $125,000, which it did not pursue because it was later offset by legal fees owed to Goldstein in a legal case their firms handled together.

Goldstein’s lawyer Jonathan Kravis said Napoli knew he was not guaranteed to make money from his firm’s investment.

Napoli told jurors that his firm continued to work with Goldstein on legal matters for years despite frustration over the poker investment. Napoli said he gave Goldstein “a lot more money on other cases.”