Tom Girardi, a once-vaunted Los Angeles attorney, was indicted by federal grand juries in two states on fraud charges for allegedly defrauding more than $18 million of clients who suffered serious injuries or tragic deaths of loved ones. prosecutors announced Wednesday.
In Chicago, Girardi and his son-in-law, attorney David Lira, and former chief financial officer of Girardi’s law firm, Christopher Kamon, were charged with eight counts of wire fraud and four counts of contempt of court . Prosecutors said the trio had embezzled more than $3 million in 2020 from severance funds intended for widows and orphans whose relatives died in a Boeing plane crash off the coast of Indonesia.
In Los Angeles, Girardi was charged with wire fraud in an indictment accusing him of embezzling more than $15 million from clients in the decade leading up to the collapse of his law firm in 2020. Those funds had gone to cover his law firm’s payroll and personal expenses, including a hefty American Express bill and fees at two country clubs, the indictment said.
The indictment is the latest development in the stunning fall of a man who was once California’s last insider. A Democratic political donor who cultivated close ties to mayors, governors, senators, justices and Supreme Court justices, he was revered — and feared — by fellow lawyers for the nine-figure deals he brokered and the powerful officials he counted as his friends .
“Mr. Girardi was widely celebrated for being a champion of those who fight against corporations, but our investigation revealed that, in reality, Mr. Girardi was robbing and stealing from those people,” said Martin Estrada, the prosecutor of the United States in Los Angeles, at a press conference Wednesday. Estrada said the allegations point to “corruption by one of the most high-profile plaintiff’s attorneys in the country.”
Girardi, 83, faces the possibility of decades in prison, though it’s unclear whether a court will allow his trial. He was diagnosed with Alzheimer’s disease two years ago.
Representatives for Girardi, Lira and Kamon did not respond to requests for comment. Girardi was due to appear in federal court in downtown Los Angeles on Monday. Kamon, who had previously been charged with what authorities described as a “secondary fraud” within Girardi’s law firm, has been in federal custody since his arrest in November.
The Times reported extensively on how Girardi corrupted the legal system and evaded the discipline of the State Bar of California — the agency that regulates attorneys — despite decades of credible allegations of embezzling his clients’ money.
The Los Angeles indictment centers on mishandling severance funds for five clients, including Josefina “Josie” Hernandez, a 54-year-old from Castaic who hired Girardi to represent her in a lawsuit against a medical device company.
After receiving a wire transfer of about $128,000 for his settlement in 2020, Girardi used some of the money to pay for the lease of luxury cars and falsely told Hernandez that court snags had delayed the money from arriving at his agency.
“We’d want our money just like you’d want yours,” Girardi told Hernandez in a voicemail that prosecutors described as a standoff tactic.
Hernandez called the allegation “validation”.
“We’ve been fighting for this for so long,” she said. She never received her compensation from Girardi, although she did receive compensation through a state bar program for victims.
Another client described by the prosecution was Joseph Ruigomez, who as a teenager suffered catastrophic burns in the 2010 San Bruno pipeline explosion. Girardi negotiated a $53 million settlement in 2013 for Ruigomez and his parents, but he told them that the agreed amount was only about $7.2 million, according to the indictment.
Some of the funds went to compensate other clients of Girardi’s that he had previously embezzled, the indictment said.
“I was afraid this day would never come,” said Ruigomez’s mother Kathleen. The family has spent much of the last decade trying to collect the money they were owed. His son, who has had dozens of surgeries, needs money to pay for medical care, he said.
“This will be the 13th year since the explosion, and I can’t wait to put that in the past — and Girardi has been preventing that for a long time,” Kathleen Ruigomez said after the charges were announced.
Girardi was also indicted for his treatment of a widow, Judy Selberg, whose husband had died in a boating accident in Lake Havasu, Arizona. Girardi used part of his $500,000 settlement to pay dues to two Los Angeles country clubs, according to the indictment.
The Chicago charges relate to the case that ultimately brought down Girardi. He negotiated deals totaling $11 million for four Indonesian families whose loved ones died in a Boeing crash in 2018.
Although the aircraft manufacturer transferred the funds to Girardi Keese’s account in March 2020, it did not send the funds to families and instead used the money to pay payroll and operating expenses at his company, other clients whose previously misappropriated and an American Express invoice.
Lira, who is married to Girardi’s daughter Jacqueline, has worked on the Boeing litigation and has been listed as a signatory on the bank account of the company holding the settlement funds. She left the firm in June 2020 and testified that she quit in outrage at her father-in-law’s treatment of Indonesian clients.
In a statement, U.S. attorney in Chicago, John Lausch, said, “The substantial embezzlement alleged in this indictment has compounded the pain and anguish of customers who lost loved ones in the Lion Air crash.” “.
Between the two cases, Girardi faces 13 counts of wire fraud; each count carries a maximum penalty of 20 years in prison.
Estrada and FBI and IRS officials, who are helping investigate Girardi and his associates, have suggested the charges announced Wednesday may not be the latest. Although the fraud in the two indictments amounted to less than $20 million, a Los Angeles federal prosecutor told a court last month that “nearly $100 million in settlement” was embezzled from the Girardi Keese law firm .
Asked whether authorities were reflecting on the criminal charges against Girardi’s estranged wife, “Real Housewives of Beverly Hills” star Erika, Estrada replied: “The investigation is ongoing and ongoing, so I cannot comment further on any individuals “.
The couple’s opulent lifestyle — private jet travel and a picture-perfect Pasadena mansion — has been a theme of the Girardi scandal.
It wasn’t until November 2020 — after Girardi had used up his considerable fortune and his financial misconduct was about to go public — that Erika Girardi filed for divorce. Creditors forced him into bankruptcy a few months later.
For the past two years, the bankruptcy trustee has been trying to mobilize assets to pay off defrauded clients and other creditors, and recently the bankruptcy trustee’s attorneys have sued Erika Girardi and a host of others who claim they received fraudulent transfers from the firm by Girardi.
Now living in a memory care facility in Orange County, Girardi is subject to a court-ordered remand that gives his younger brother, Robert, a dentist in Seal Beach, the authority to make decisions for him on matters of health care and finances. Guardianship records indicate that Girardi has been prescribed dementia medications and he also suffers from blindness in one eye and “hard of hearing.”
When asked Wednesday about Girardi’s Alzheimer’s diagnosis, Estrada said, “We’ll let the court determine the issues of jurisdiction.”
He noted that the charge covers conduct from 2010 to 2020, when Girardi was a practicing attorney. “We believe the evidence demonstrates his competence during that time,” Estrada said.
Last year the state Supreme Court stripped Girardi of his attorney’s license on the recommendation of the state bar. The agency admitted it had mishandled decades of complaints against Girardi, and in a statement, its board chairman, Ruben Duran, called the allegations “further evidence of the seriousness of the abuse and wrongful behavior that ultimately ultimately led to Mr. Girardi’s expulsion”.
“The State Bar Association is committed to continued reform of our regulatory and disciplinary duties to address these serious issues,” Duran added.
Times investigation into Tom Girardi
This story originally appeared in the Los Angeles Times.