Federal jury convicts disbarred RHOBH lawyer Tom Girardi in client fraud case
Federal jury convicts disbarred RHOBH lawyer Tom Girardi in client fraud case
The 85-year-old former legal king pin will remain out of custody at least through sentencing, which is scheduled for Dec. 6 in Los Angeles.
A federal jury in Los Angeles on Tuesday convicted disbarred lawyer Tom Girardi of four felonies for a 10-year scheme that defrauded clients out of millions of dollars in settlement money.
The 85-year-old will stay out of custody at least until Dec. 6, when U.S. District Judge Josephine L. Staton scheduled sentencing, and prosecutors said his age won’t stop them from recommending a prison sentence.
“The mere fact that he is an older, older adult, does not mean we will not seek prison. It’s important in a case like this, not only to punish the wrongdoer, but to send a message to others out there who would think of doing the same thing that there will be serious consequences,” Martin Estrada, U.S. attorney for the Central District of California, said at a press conference.
Estrada said Girardi’s “insatiable appetite for money is what led him to court and what led to this verdict today.”
Juror Miguel Lopez told reporters outside that courthouse that he and the 11 other jurors disregarded a defense expert who testified about Girardi’s dementia because she only considered his actions after 2020. He said they could tell from Girardi’s testimony that he “has mental problems.”
“But it’s just this time right now. Wasn’t from before,” Lopez said outside the courthouse.
He said he felt particularly bad for “the lady that lost the child — she didn’t get the money — and the other lady that lost her husband” and declared bankruptcy.
“A lot of people were in pain, and he was taking advantage of them,” Lopez said.
Girardi did not exit the front entrance of the courthouse when I was there, but here he is leaving the courthouse on Monday. (Update: I’m told he did exit the front eventually.)
Judge Staton read the verdict about 11:30 a.m. Jurors deliberated about five hours over two days. The convictions mark a spectacular fall from power for Girardi, who for decades was the most prominent plaintiff’s lawyer in Los Angeles and enjoyed huge influence in mass torts and class actions as well as California judicial appointments.
He was famous both in legal circles and reality TV circles because he married Erika Jayne of Real Housewives of Beverly Hills and often appeared on the show. Financial records in trial showed the Girardi Keese law firm sent about $21.9 million to Erika’s company EJ Global between 2010 and 2020, while Girardi was defrauding clients. Prosecutors used a clip from a 2019 Real Housewives episode as evidence that he was mentally fit when he was lying to clients, and to remind jurors of what Girardi says in the clip: that plaintiff’s lawyers need to be persuaders.
Girardi’s marriage to Erika unraveled about the same time his co-counsel in a class action over a deadly plane crash told a federal judge in Chicago that clients weren’t getting paid.
U.S. District Judge Thomas M. Durkin in December 2020 sanctioned Girardi and his firm $2 million and referred Girardi and associates to the U.S. Attorney’s Office for criminal prosecution. Prosecutors there unveiled an indictment the same day Los Angeles prosecutors announced the charges against Girardi and Kamon. The California State Bar permanently revoked Girardi’s law license in 2022. Bar officials announced last January that it had received 205 complaints about Girardi in 40 years, 136 before his 2020 downfall. Approximately 120 related to client trust accounts, which is where attorneys keep client money and what Girardi pilfered when victimizing his clients.
Judge Staton declared Girardi mentally competent for trial after an evidentiary hearing last fall.
His public defenders argued in trial that the fraud was actually the work of Girardi’s law firm accountant, Christopher Kamon, who is charged with aiding and abetting Girardi and will be tried separately.
Deputy Federal Public Defender Charles Snyder described Girardi in his closing argument on Monday as someone who grew old, got sick and “lost his mind” while Kamon victimized him by stealing up to $100 million and truing to escape to the Bahamas. He told jurors that what happened at Girardi Keese should never have happened, but that Girardi can’t be blamed for the clients’ plights and couldn’t have intentionally defrauded them. He said Girardi’s testimony last Thursday showed that “the lights are on but nobody’s home.”
“If you think that was fake, don’t wait for the exhibits. Come back out and convict him,” Snyder told the jury.
Snyder called Kamon “a generational talent” who is “Michael Jordan” and “one of the goats,” meaning greatest of all time.
“This was Mr. Kamon’s scheme,” Snyder said.
In rebuttal, Assistant U.S. Attorney Scott Paetty reminded jurors that “we’re in L.A.” so Girardi “is the Lebron James if liars.” He said Girardi needed an accountant with a loose moral code such as Kamon, and the fact that Kamon is a thief, too, only means that Girardi Keese LLP was “a den of thieves” and Girardi was its “thief-in-chief.”
Assistant U.S. Attorney Ali Moghaddas reminded jurors in his closing argument that litigation lender Alan Zimmerman and L.A. lawyer Jeffrey Isaacs both testified that Girardi wouldn’t allow them to access the firm’s financial records.
“He knew what was there. … Because that’s how he’s been running his firm since the 1990s,” Moghaddas said.
The issues began “long before Mr. Kamon got there.”
Will other client victims come forward for sentencing?
Prosecutors said the fraud was a 10-year Ponzi scheme involving $15 million, and a U.S. Attorney’s Office press release about Girardi’s convictions said he embezzled “tens of millions.” However, the actual amount of money lost will surely be disputed at sentencing after Girardi’s lawyers repeatedly pointed out in trial that some victims did receive some money. Prosecutors say the payments are part of the wire fraud crimes because they’re meant to lull clients into allowing the fraud to continue. But sentencing for wire fraud depend on the total amount of money involved, so Girardi’s partial payments could be relevant.
Estrada said Tuesday that prosecutors will cite at sentencing other clients who’ve been victimized by Girardi but weren’t involved in the charges.
“We expect other victims to come forward … which will likely increase the loss,” Estrada said.
Girardi’s convictions are four bank transactions involving four settlements. The earliest was a $53 million settlement reached in 2013 with Pacific Gas and Electric Co. for the Ruigomez family over a gas explosion that badly injured Joseph Ruigomez and killed his girlfriend.
The other client victims were Josefina Hernandez, who never got anything from a $135,000 settlement reached in May 2020 for injuries related to a defective medical device, Judy Selberg, whose lawsuit over her husband’s deadly boat crash settled for $504,400. The fourth victim was Erika Saldana, whose lawsuit over her son’s catastrophic injuries in a car crash settled for $17 million. The boy died while Saldana was still trying to get her money from Girardi.
Moghaddas called Girardi a “legend in the legal community” and a “powerhouse lawyer” who “wanted people to think he came to work every day fighting wrong” and fighting for people who couldn’t fight for themselves.
He reminded jurors how Girardi met with Kathleen Ruigomez in a hospital when her son was still in a coma, and how he gained the trust of the other alleged client victims then “lied to them over and over and over again.”
Girardi’s lawyers say the case is complicated, but Moghaddas said “it’s not complicated” and that Girardi had a duty to “promptly” pay his clients their money.
Moghaddas said “there’s no question the defendant was going through something in 2020,” but to consider the full scope of Girardi’s fraud, jurors must “think back to 2010 when he signed up the Ruigomez family.”
Moghaddas reminded jurors of what Judge Staton instructed them: Girardi isn’t on trial “for being a bad lawyer,” nor is he on trial for violating the California Rules of Professional Conduct. Instead, Moghaddas said the evidence shows he lied to his clients about their money when he knew that “as soon as that money went into the Girardi Keese trust account, it was spent.”
“Members of the jury, he knew,” Moghaddas said. He displayed emails Girardi wrote the Ruigomez family and said “the lies to them keep on going,” including that retired California Supreme Court Justice Edward Panelli, who died three weeks before trial, was holding up the payments. Moghaddas highlighted a line that said “I’ve never believed in a case more,” and told the jury, “This is the classic Tom Girardi charm that we’ve heard about.”
“Behind the curtains, members of the jury, he was pilfering their funds,” Moghaddas said.
‘He keeps his lies straight’
Moghaddas walked jurors through the first few months after Girardi’s received the initial settlement payment for the Ruigomez family. Seven months after receiving $28 million, he sent the family their first check for $54,166. Over the next four years, they received $766,660.
Then in July 2019, they got a check for $2.5 million that Moghaddas said wasn’t actually their money: It was a mixture of other clients’ money and money from a casino sale. Moghaddas reminded them of Jeffrey Isaacs’ testimony about suing Girardi over missing client money in another case and said Girardi’s clients “hired the lawyer to sue the lawyer - that lawyer” and pointed at Girardi sitting at the defense table.
He displayed emails prosecution witness Alexa Galloway wrote when she was a Girardi Keese associate trying to get Selberg her portion of the $504,000 settlement. “There is NO reason to withhold the clients’ funds any longer,” Galloway wrote.
Moghaddas also highlighted testimony in which Galloway said Girardi “would get progressively more upset with me” as she inquired about the case. Asked if anybody could stop Girardi from paying clients, Galloway answered “no, no no.”
Around the same time, Girardi was lying to Hernandez about her settlement in a lawsuit over a medical device injury. And as seen in his emails to her, “He keeps his lies straight.”
“He knows who he’s talking to. His lies build on each other. He’s not confused,” Moghaddas said. Moghaddas highlighted Girardi’s promise to send Hernandez a personal check as evidence that he “knows how to do it.”
While corresponding with client victim Erika Saldana, Girardi knew “he’d spent her money, but he knows how to buy more time,” Moghaddas said “He’s the king of that.”
Saldana drove to Girardi’s office and picked up a check for $5,000 that she described in testimony as insulting. Meanwhile, Girardi had spent her money on “golf memberships, country clubs” and paying clients as a way to continue his Ponzi scheme.
In November 2020, one month before the firm closed, Girardi told Saldana to stop by the office, then canceled and said he couldn’t be there because he’d had cancer surgery. Instead of spending time with her son during his final days, “she is chasing him to get paid.” Moghaddas pointed out a line in Saldana’s email in which she told Girardi, “This isn’t fair and you’re taking advantage of my family.”
“And he was,” Moghaddas told the jury.
Girardi blamed Kamon, but it wasn’t Kamon who was lying to clients. And it wasn’t Kamon who blocked litigation lender Alan Zimmerman from auditing the firm’s financial records. Girardi didn’t want Zimmerman to see his books “because he knew what was there.”
“Because that’s how he’s been running his firm since the 1990s,” Moghaddas said. The issues began “long before Mr. Kamon got there.”
Then Girardi got on the stand last week “and had the gall to testify I’ve never taken a salary.”
Yes, his firm was due a portion of the client settlements, but “it’s not his money when he owes the client’s money.”
Moghaddas said “there’s no question Mr. Kamon is guilty” and “mark my words … he will face his day in court. No doubt about it. But today is not his day.”
“To say ‘Kamon did it,’ doesn’t fly,” Moghaddas said.
While Girardi isn’t there now “the only mental state that matters is at the time of the charged crimes.” And Girardi’s fraud, “goes way back.”
“They can’t explain it,” Moghaddas said of Girardi’s lawyers.
He also pointed out that the only lies Girardi appears to have told regarding client money. His longtime secretary, Shirleen Fujimotio, said he didn’t lie about other things.
“The only thing he seems to lie about is where these people’s money is. Isn’t that funny?” Moghaddas asked.
Girardi dumped his own money into the firm, including $38.7 million into the operating account between 2015 and 2020 and $43.475 million into client trust accounts between 2017 and 2020, which Moghaddas said “show you he’s sophisticated” and knew what to do to keep his scheme going.
“He was always waiting for that next big case,” Moghaddas said.
But at the same time, people around Girardi were realizing what was happening. Moghaddas displayed an email firm lawyer Bob Finnerty wrote Girardi on April 10, 2019, that said “your refusal to deal with client payments” cannot continue.
Finnerty mentioned “Justice Trotter,” who is Jack Trotter, the retired state appellate justice and co-founder of the private judging company JAMS, and said Girardi was jeopardizing their friendship.
Moghaddas also displayed an email from firm lawyer David Lira, who is charged with Kamon and Girardi in the Chicago case, to Kamon on March 4, 2020, in which he wrote, “worse than bad. Tom is lying to clients.”
“His actions in 2019 and 2020 show he knows what he was doing,” Moghaddas on Monday.
Moghaddas also showed the jury clips from a Real Housewives of Beverly Hills episode in which Girardi talks about being persuasive and told them, “this is the defendant” while Saldana was begging for her money. He played another clip from a 2020 podcast interview in which Girarid talked about how “plaintiff lawyers are persuaders.”
“Don’t be persuaded and distracted by Chris Kamon. Don’t be persuaded and distracted by his mental decline in 2019 and 2020,” he said.
Defense cites A Beautiful Mind and Weekend At Bernie’s
Snyder began his closing by saying he wanted to end “where we stared” by discussing Kamon’s arrest in 2022 after he flew into the Baltimore, Maryland, airport from his beach house in the Bahamas.
Snyder said “if this were a [California state] bar trial,” Girardi would be finished because he combined client money into trust accounts, but in a criminal case, the commingling “is actually very helpful for the defense” because prosecutors have to prove Girardi acted with intent and wasn’t merely confused while working in a chaotic accounting system.
“The remedy for being a bad manager is going out of business, and he certainly has,” Snyder said.
Snyder also said the timing of Girardi’s alleged fraud doesn’t make sense. By 2010, Girardi had done it all and had nothing to prove. He didn’t need to cheat to win, and the fact that the fraud started then “is weird,” Snyder said.
“This doesn’t make sense,” he said. He said it “may sound harsh,” but Girardi got old and sick “and lost his mind.”
Snyder referenced two movies in his closing: A Beautiful Mind and Weekend At Bernie’s, which he said capture Girardi’s situation because he lost his mind and “everyone else at the firm was running the show and “propping him up.”
“I can’t make it through this trial without mentioning Weekend at Bernie’s,” Snyder said.
Snyder ended his closing on a personal note, telling jurors that his mother was a successful lawyer and former federal prosecutor who suffered the same sort of mental decline Girardi did.
Prosecutors emphasized what Lopez the juror said persuaded the jury to disregard defense claims that Girardi has dementia and Alzheimer’s disease: The case is about his intent between 2010 and 2020, not now.
“Everybody knows this is not the same guy as the Erin Brockovich lawyer,” Paetty said. But Girardi “wasn’t an absentee landlord. He knew what was going on at his law firm.”
“He’s a not an in-the-weeds guy, but he’s a numbers guy,” Paetty said.
Defense attorneys are scheduled to file post-trial motions before sentencing, such as a motion for new trial.
Previous trial articles:
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