A convicted Wall Street swindler owes New York $59.1 million in back taxes, yet he lives in a $5 million California home the state has never put a lien on.
Story Highlights
- Records reported Tuesday, October 20, show two active New York tax warrants against Daniel Gordon totaling $59,141,763.16
- Gordon, a former Merrill Lynch energy trader, pleaded guilty in 2003 to a $43 million fraud
- County records show no New York lien on his Rancho Mirage, Calif., home, valued at more than $5 million
- California Gov. Gavin Newsom sent Gordon a November 2024 letter thanking him for his “generous contributions,” with a handwritten “Thank you!”
- Gordon and Newsom’s office did not respond to requests for comment
Why New York Says He Owes $59 Million
The debt traces back to the money Gordon stole. In 2003, Gordon, then an energy trader at Merrill Lynch, pleaded guilty to a wire fraud scheme that sent $43 million from the firm to an offshore shell company and hid it behind a phony insurance deal. He was sentenced to 42 months in prison, fined $100,000 and ordered to forfeit the stolen money. Stolen money still counts as taxable income, so tax agencies came after him for the taxes on it, and interest and penalties have piled on for years.
Albany County records show two active state tax warrants against Gordon totaling $59,141,763.16, according to reports published Tuesday, October 20. A tax warrant is a public filing that puts a tax debt on the record so the state can collect it, much like a court judgment. In 2016, New York’s “Top 100” list of delinquent taxpayers ranked Gordon No. 1, with $25.1 million in outstanding warrants. The balance has more than doubled since then.
A Mansion Without A Lien
Gordon lives with his wife, Kate, in a 10,495-square-foot home in Rancho Mirage, near Palm Springs. State tax records value it at more than $5 million. County records show New York has never recorded a lien on it. A lien is a legal claim on property that has to be paid off before the property can be sold.
In March 2024, an anonymous Texas businessman who is in a court fight with Gordon sent tips to the internal affairs office of the New York Department of Taxation and Finance. He pointed to $4.1 million in California real estate and $22 million in public company stock tied to Gordon. An investigator wrote back that he would “forward this to the appropriate department.” More than two years later, the state had not acted on the tips, according to the report. New York tax warrants expire after 20 years, and half of that time has already passed.
Newsom’s Thank-You Letter
Gordon runs Gordon Philanthropies, a charity focused on prison reform and literacy. Its website shows him at ribbon cuttings and events with the Los Angeles Police Department and the California Department of Corrections. In November 2024, Newsom sent him a letter addressed to “Daniel.” It reads, “Thank you again for your generous contributions,” and “I look forward to your continued partnership.” Above the signature sits a large handwritten “Thank you!” The charity shows the letter on its Facebook page.
Newsom’s office did not respond to requests for comment. California prison officials did not address Gordon’s record or his tax debt. They pointed instead to rules that allow private gifts.
What Officials Have Said
Darren Dopp, a spokesman for the New York Department of Taxation and Finance, declined to discuss collection efforts, citing state tax secrecy laws. Those laws bar the agency from talking about a person’s tax file. Dopp did say the state drops a debtor from its Top 100 list when no new warrant is filed within 12 months.
Federal court records show the tax fight goes back many years. In 2009, a federal judge in Manhattan wrote that the IRS found Gordon owed more than $30 million, mostly from the stolen income. Gordon fought those claims in U.S. Tax Court and argued that a cooperation agreement with the IRS waived taxes and civil fraud penalties. He later filed for Chapter 7 bankruptcy, a kind of bankruptcy that can wipe out many debts. A federal bankruptcy judge denied him a discharge, which means his debts were not wiped out and creditors could keep trying to collect.
Why It Matters To Taxpayers
New York keeps public lists of its biggest tax debtors. In December 2022, the state comptroller counted almost $407 million owed by the top individual debtors on those lists. A warrant puts a debt on the record, but collecting it takes action, such as a lien or a levy, which is a legal seizure of money or property. In Gordon’s case, the public record shows a $59.1 million debt, a $5 million home and no lien on it. Families and small businesses who pay their taxes on time can weigh that for themselves.
Sources:
nypost.com, nysb.uscourts.gov, casetext.com
