Girardi's expert says she doesn't know if he could have committed fraud before 2020
Girardi's expert says she doesn't know if he could have committed fraud before 2020
The disbarred mega lawyer, described in testimony as the "godfather" of the plaintiffs' bar, is charged with four counts of wire fraud involving four client settlements.
In a video shown last week during his fraud trial, Tom Girardi sits next to Erika Jayne as she tells her friends he has a lot of young women working at his firm.
“Jurors now, they watch for things like that,” Girardi adds.
The footage was from an October 2019 episode of Real Housewives of Beverly Hills "that I’d love to show you,” Assistant U.S. Attorney Ali Moghaddas told neurologist Helena Chui, but the prosecutor moved on to a short clip from a podcast interview a year later before asking Chui if the clips show “an individual incapable of committing fraud.”
Chui, who is chair and professor of neurology at University of Southern California’s School of Medicine, testified she doesn’t know because she wasn’t asked to assess Girardi’s abilities before 2021. Her testimony that he has dementia is based on an analysis of him between 2021 and 2023 that included in-person interviews at his assisted living center.
Moghaddas said the case against Girardi is “much broader than that time period” and asked if Chui believes Girardi was capable of fraud between 2010 and 2020. She answered, “I was not asked that question” when Girardi’s defense team hired her to assess his mental competency. If she had, “I would have asked for more information from particular people that I thought were knowledgeable.”
“I would question his capacity from 2021,” Chui testified.
Moghaddas showed Chui a letter Girardi wrote in 2013 to clients James and Kathy Ruigomez, whom he’s accused of defrauding out of a settlement related to their son’s injuries in a natural gas explosion. “In the dumb division, I think I’m an honoree,” Girardi wrote.
Girardi told the couple that the mediator who oversaw the settlement, retired California Supreme Court justice Edward Panelli “knew many young men who got a large sum of money and it ended up in a total disaster,” which was preventing them from receiving the millions Pacific Gas and Electric Co. owed them for an explosion that badly injured their son.
Chui said that her time on the witness stand was “the first time I’ve heard about Ruigomez and Mr. Panelli.”
Chui’s testimony in direct exam that Girardi has dementia is central to the 85-year-old disbarred lawyer’s defense that he did not knowingly defraud his clients and was instead a victim himself of former Girardi Keese LLP Chief Financial Officer Chris Kamon. Kamon is charged with aiding and abetting Girardi as a co-defendant — he’ll be tried separately — and also charged in a separate case with embezzling from the law firm.
Chui said the second clip of Girardi, from an October 2020 podcast interview, shows him in a state similar to what she saw when she met him in April 2021, and she said his comments about jurors didn’t seem particularly remarkable. She also questioned an email he sent staff in August 2020 announcing their pay would be cut by one-third and telling them they needed to return to the office because revenue was down during the pandemic. Chui said the email showed a “jump in reasoning,” drawing an incredulous response from Moghaddas.
But even with those remarks, Chui’s fast acknowledgment that she knew nothing of Girarid’s actions before 2021 firmly benefits prosecutors, who are trying to persuade jurors that Girardi knew what he was doing when he lied to clients for years about their money.
Chui testified out of order on Thursday as a defense witness because of scheduling issues. Moghaddas and Assistant U.S. Attorney Scott Paetty are expected to rest their case Monday after Internal Revenue Service Special Agent Ryan Roberson finishes testifying.
Girardi ‘would use Justice Panelli as a middleman’
Girardi is charged with four counts of wire fraud for transactions involving four settlements and an alleged $15 million.
The federal statute of limitations for wire fraud is five years, but some of the cases at issue began years earlier, and jurors have seen correspondence between Girardi and clients from more than a decade ago. Girardi's second wire fraud count is for a $2.5 million payment to the Ruigomezes in 2019, but jurors have seen evidence that Girardi lied to the family about the full amount of the settlement he received in 2013, never telling them it was actually $53 million.
Joseph Ruigomez was the first witness, testifying on Aug. 7 about Girardi promising to pay him $5 million from a settlement with PG&E for an 2010 explosion that killed his girlfriend and left him in a coma and permanently disabled. Jurors heard voicemails Girardi left for the family and saw emails in which he tried to explain why they hadn’t received their money, including by blaming Panelli for his supposed concern about Joseph Ruigomez’s dependency on medication.
“When I would ask for money, he would use Justice Panelli as a middleman,” Ruigomez said. “He would tell me he can’t give me my money unless Panelli signed off on it.”
In one 2016 email, Ruigomez told Girardi he enjoyed seeing him and his wife on Real Housewives of Beverly Hills. “Very cool,” Ruigomez wrote.
He testified in trial that Girardi “and his wife were on a reality show called Real Housewives of Beverly Hills, and I caught a glimpse of it. Thought it was cool.”
As her son watched from the gallery, Kathy Ruigomez testified later in the day that she wanted “somebody who could go against PG&E,” and Girardi impressed her with his accolades and magazines covers, some of which he gave her when trying to secure her as a client.
“After going home and reading them, we definitely picked them,” she testified about the Girardi Keese firm, of which Girardi was the sole owner.
Jurors saw the Ruigomezes grow increasingly suspicious in their correspondence with Girardi, eventually firing him and demanding a full accounting of the settlement money he was supposed to be holding for them in a client trust account. Joseph Ruigomez testified that he ultimately received a $10 million settlement in 2019 after "hiring another lawyer to get my money back."
In cross-examination, Deputy Federal Public Defender Samuel Cross questioned Ruigomez about his “drug problem,” referring to Girardi’s claim that Panelli was reluctant to release his money because of it.
Ruigomez testified he “had a drug dependency” after the explosion, and Cross said, “I appreciate your candor.”
On re-direct, Moghaddas asked Ruigomez if he authorized Girardi “to withhold settlement funds because of your dependency on medication,” and Ruigomez answered no. He also testified that at the time, he “desperately” needed the money.
Moghaddas said in court last week that Panelli was to testify as a prosecution witness, but he died three weeks before trial began. Prosecutors have questioned Girardi’s former employees about his claims regarding Panelli to try to show jurors he was lying and Panelli was not preventing any payments.
Ex-associate calls Girardi’s tax claim ‘pretty preposterous’
The first former employee who testified was Alexa Galloway, who’s currently an associate in Hanson Bridgett LLP’s Los Angeles office. She testified on Aug. 8 that she started at Girardi Keese as a law clerk, and Girardi promoted her to associate when she passed the California State Bar examination in November 2018.
Galloway worked on a lawsuit on behalf of Judy Selberg, whose husband died in a boat crash on Lake Havasu in Arizona. The case settled for $504,400, and Galloway testified she left the check in a bin outside Kamon’s office, though she knew only Girardi had authority to sign it. Weeks went by and Selberg still hadn't been paid, and she repeatedly contacted Galloway asking for her money. She told Galloway she’d report her to the California State Bar if she didn’t get her money in the next month, which she eventually did.
But when Galloway asked Girardi about the money, she testified he would get angry and upset and tell her “your role on this case is done” and to focus on her other cases. Galloway testified she was concerned about his claims to Selberg that he was dealing with an issue with the IRS regarding the settlement that would have taxed her more because she’s a woman.
“I certainly knew for sure that there would never be a tax law that differentiates men and women,” Galloway testified, agreeing with prosecutor Paetty that Girardi’s letter to Selberg about the tax issue was “pretty preposterous.”
Jurors also saw a November 2020 email Galloway wrote Girardi in which she asked if the firm would be providing her representation. She also told him there are “ZERO tax issues” related to the approximately $251,000 the firm owed Selberg.
“This is not just about the client. This is about my career,” Galloway wrote. She later resigned.
“The last phone call we had, he hung up on me after screaming at me,” Galloway testified.
In cross, Federal Deputy Public Defender Charles Snyder seemed to imply that Galloway may have been responsible for mishandling the settlement. He also said of Girardi’s correspondence, “This seems like a lot of effort to go through if there was never an intent to pay.” He asked Galloway about small payments Girardi sent Selberg, prompting U.S. District Judge Josephine S. Staton to interject, “I don’t think we need the witness to do math.”
Much of Snyder’s crossed was based on a ledger the firm used to track payments in Selberg’s case. Galloway testified she’d never seen the document, but prosecutors didn’t object. Judge Staton pointed out that both sides had allowed Galloway to testify to a document she’d never seen.
Jurors also heard from Selberg, as well as Eric Seuthe, the Beverly Hills-based malpractice lawyer she hired to pursue her money from Girardi. Seuthe testified that Girardi left him more than 20 voicemails in 2020, but “I never felt he was confused."
“I felt he was trying to confuse me,” Seuthe testified, according to reporter Amanda Bronstad of ALM/Law.com. Jurors heard voicemails Girardi left for Seuthe, including one in which he said, “Don’t be mad. Be nice, forgive me, and ask the client to forgive me.” Seuthe said Girardi’s claims about a tax issue related to Selberg’s gender was “irrational,” but he believed it was part of a premeditated ruse to continue defrauding Selberg.
Alleged client victim was ‘so over being victimized’
Alleged client victim Josephina Hernandez testified on Aug. 12 about her efforts to obtain her share of a $135,000 settlement in May 2020 for injuries related to a defective medical device. She didn’t interact with Girardi until after her case settled, then he left her a couple voicemails in which he “basically gave me just excuses.” Jurors saw correspondence in which Hernandez said she was “emotionally exhausted” and “my bank account has been in the red.”
“I’m so over being victimized,” Hernandez wrote.
In a September 2020 email, she told Girardi, “It’s difficult to summarize the heartache I’ve endured as your client. I’m unable to speak with you for fear of breaking down in tears.”
She said n trial that she felt Girardi was “passing the buck” and that she could never get a straight answer from him.
“I felt like we were going backwards instead of forward,” she testified.
On cross, Deputy Federal Public Defender Alejandro Barrientos focused on Girardi’s lack of involvement in much of her correspondence about her settlement, causing Hernandez to testify that she assumed Girardi knew what was going on at his firm because “his name’s on the door.”
Girardi’s third wire fraud charge is for a $128,250 deposit his client trust fund account received in 2020 for Hernandez’s case.
Attorney Arin Scapa testified after Hernandez about working on Hernandez’s case while at Girardi Keese and learning from the client that she hadn’t been paid.
“Once a case is settled, I am not involved with the payment of settlement funds,” she said.
Scapa testified that she gave Girardi her resignation letter on Dec 6, 2020 after failing to get the client paid and “He threw the letter right back at me.”
Jurors have heard about Girardi Keese’s spending from Roberson as well as Norina Rouillard, who began working in accounting for the firm in 2003.
Moghaddas displayed a list of expenses charged to the firm for Erika’s company EJ Global between 2010 and 2020. It totaled nearly $21.9 million, beginning with $5.7 million in 2010 and falling to $100,000 in 2019 and again in 2020.
Rullioard testified that Girardi decided which employees got their own American Express card, recalling that one person paid his property taxes with his. She also testified about expenses for resorts, airlines, five-start hotels and high-end restaurants as well as memberships to posh country clubs and private power-broking spots such as Los Angeles’ Jonathan Club. She testified about expenses for lavish parties such as Girardi’s annual Super Bowl bash and his holiday party with country music singer Leanne Rimes.
To finish, Moghaddas asked Roulliard of Girardi, “Did you ever see anything that made you doubt his ability to run the firm?”
“No,” she answered.
Snyder’s cross-examination of Roulliard focused on her work with Kamon. When he asked her if she was “secretly running money” through a different bank account, she answered, “I don’t know if secretly.”
Snyder also pressed Roulliard about Girardi’s cognitive issues in late 2020, including text messages she wrote in late 2020 that said Girardi was delusional, couldn’t remember anything and was “losing it mentally,”causing her to cry on the witness stand. (Read more in Amanda Bronstad’s Law.com article.)
‘There was a reason for his success: He was no fool.’
Jurors last Tuesday, Aug. 13 heard from Alan Zimmerman, a litigation lender who advanced Girardi $12 million for a $90 million settlement with Shell Oil Co. Zimmerman testified that he’s always seeking “successful lawyers” who may need loans, and he dined with Girardi at Morton’s The Steakhouse in downtown Los Angeles before receiving an April 16, 2018, letter from him that said “the law firm has never been more successful.” Girardi also sent Zimmerman magazine articles touting his success.
“Is it easy for any attorney to be on the cover of those magazines?” Moghaddas asked.
“I honestly don’t know the answer to that,” Zimmerman answered.
Moghaddas asked if he saw Girardi suffering cognitive issues, and Zimmerman quickly answered, “No.”
“You say that so confidentially. Why?” Moghaddas asked.
“He was very sharp mentally. There was a reason for his success: He was no fool,” Zimmerman testified.
Zimmerman said he was in Los Angeles attending Girardi’s St. Patrick’s Day party when another attorney at the firm, Bob Finnerty, asked him, “You got paid, right?”
“I said no,” Zimmerman recalled.
Jurors saw a letter Girardi wrote Zimmerman that said “I totally, negligently violated the agreement to repay out of the Carson/Shell fees.”
“From the bottom of my heart, this was innocent,” Girardi wrote.
Zimmerman eventually hired a lawyer, and he and Girardi agreed in mediation to a $26 million payment. Girardi paid him $10 million, but he testified he’s still owed $6 million.
Moghaddas asked if Zimmerman would have loaned Girardi money if he knew he was abusing client trust fund accounts.
“We would not have loaned him anything,” Zimmerman answered.
Client cries as she recalls Girardi talk on dead son’s birthday
The final alleged client victim to testify was Erika Saldana, who first appeared in the courtroom on Wednesday wearing a mask and said that she’d testified positive for COVID two days earlier. She was on the stand for a few minutes before Judge Staton interrupted her testimony and said she’d need to come back later because she was sick.
Saldana ended up testifying remotely from a conference room in the courthouse about her young son being badly injured in a car crash caused by a drunken driver. Girardi represented her in a lawsuit, and she was due $17.5 million — $10 million of which would be held in trust for her son and $7.5 million of which she and her husband would receive for expenses such as medical equipment, though the firm would take about $5 million for fees and express.
Saldana received payments totaling about $1 million but was rebuffed when she asked for all she was owed, despite needing money to buy a home to accommodate her son’s medical needs. She frequently emailed Girardi asking for information, and she documented promises he made to her in phone calls.
“You told us that we would get everything that is owed to us at the end of August,” Saldana wrote on Sept. 11, 2020.
In late October, she received a check for $5,000 and “felt really offended.”
“I didn’t even cash it. I just ripped it,” Saldana testified.
Moghaddas questioned her about a Nov. 18 email that Saldana said prompted Girardi to call her and tell her “I was not being understanding.”
Saldana said she told Girardi that she was “tired of everything. She began to cry as she testified, “That was my son’s last birthday before he passed away.”
Reporter Maia Spoto of Bloomberg News pointed out that Girardi’s defense cross-exam revealed a second settlement in Saldana’s case that could help establish Girardi’s didn’t know what he was doing, but it may have been overshadowed by Saldana’s poignant direct-exam.
H. John Abassian testified after Saldana. He’s the lawyer who referred her to Girardi Keese, and he described Girardi as “the Godfather of our industry” who had the resources to take on cases that Abassian could not.
Abassian recalled picking up a $5.1 million check related to Saldana’s settlement and taking it to Girardi’s office for his signature. Girardi “went off on me” and scolded him that the firm had bills to pay. Girardi took the check, and Abassian testified he only got “some” of the $2.8 million Girardi owed him for the referral and his co-counsel.
IRS agent details Girardi Keese’s cash flow
Roberson took the stand after Abassian. He also investigated Michael Avenatti, the other fraudulent plaintiffs’ lawyer prosecuted for wire fraud in the Central District of California. Coincidentally, another man was in the courtroom last week who has ties to both cases: Rick Kraemer of Los Angeles-based Executive Presentations trial support services. Kraemer attended Avenatti’s December 2022 sentencing as a supporter, and he testified in Girardi’s defense at his mental competency hearing. He was in the gallery Thursday watching
Roberson’s testimony highlighted the specifics of Girardi’s four wire fraud charges and also walked jurors through settlement money Girardi received and how he spent it. For example, on Jan. 23, 2013, the firm’s client trust fund account with Torrey Pines Bank had a balance of $1.4 million. The next day, it received $28 million as part of the Ruigomez settlement. By Aug. 30, 2013, the balance was about $4.7 million, but the Ruigomez family had only received about $292,000.
Roberson also testified about Girardi receiving Selberg’s $504,400 settlement on June 25, 2020, and using some of the money to pay membership fees at the Bel-Air Country Club, Wilshire Country Club, Lakeside Country Club and The Plantation Golf Club. Roberson also testified about nearly $70 million between 2010 and 2020 for luxury cars, jewelry for “the defendant’s wife” and other expenses, including a downpayment on a condo for “Pat Bigelow,” whom Roberson described as a “former California state judge.” He was referring to Patricia “Tricia” Bigleow, who was a California Courts of Appeal justice when she was in a romantic relationship with Girardi and he gave her money for a house. The Los Angeles Times published an article about this in August 2022.
Roberson is back on Monday for more cross-examination from Snyder, who focused Thursday on strange emails Girardi was sending in 2020 alleging conspiracies involving Joe Biden and billions of dollars. Snyder also questioned Roberson about Kamon’s conduct, which includes sending $2.3 million to the Bahamas and buying a home on the beach there. Roberson said the transactions were from a “completely different trust account” than the Torrey Pines account at issue in the indictment, but he also said he doesn’t believe Giradi’s signature authorizing transactions on the account was forged.
“May I explain why?” Roberson asked.
“No,” Snyder said.
Roberson added, “I absolutely do not think these are forged,” but Snyder didn’t expand, so I anticipate we will hear more about that on re-direct. Snyder also showed Roberson emails between firm employees in which they discuss how to handle Girardi apparently falling for scam emails. One wrote, “do not show him BS emails like this.”
Judge Staton repeatedly sustained prosecution objections as Snyder read from documents displayed for Roberson. After the jury left for the day, Snyder said this case is document based, so “maybe the court can give us some guidance” on how to proceed with the emails and other documents the defense wants to show Roberson.
Staton said she’ll continue to sustain objections if Snyder continues to read from documents and ask Roberson, “Is what I read correct?”
“You can use the document to perhaps ask questions of the witness” related to the substance of the document and his knowledge, the judge said.
“I appreciate that; that’s helpful,” Snyder replied.
About the courtroom electronics restrictions…
I first reported on a federal criminal trial in 2008 in Boise, Idaho. It was a death penalty trial about child sexual abuse, and U.S. District Judge Edward Lodge did not allow electronics in the courtroom, but he allowed them in an overflow room that had an audio feed from the courtroom, and I live tweeted the proceedings for The Spokesman-Review. Then in 2011, covered a federal trial in Boise involving a white supremacist lawyer who hired his handyman to kill his wife and mother-in-law, and U.S. District Judge B. Lynn Winmill did not allow us to transmit from the courtroom but did allow us to use our laptops for note-taking purposes.
Later that year, retired Spokesman-Review reporter Bill Morlin took me and another reporter over to the federal courthouse in Spokane to meet U.S. District Judge Justin Quackenbush, who was presiding over the criminal case of a white supremacist who left a bomb along the planned route of the Marin Luther King Jr Day Unity March. Judge Quackenbush was going to allow electronics in an overflow courtroom for the trial, which never happened because the defendant took a plea deal.
Then in October 2011, I live tweeted the federal criminal trial of a Spokane police officer from a courtroom in Spokane that had a live video feed of the trial, which had been moved toYakima because of pre-trial publicity. U.S. District Judge Fred Van Sickle authorized the video feed and the use of electronics.
Now it’s 2024 in Los Angeles, and I had to be wanded for electronics before I first stepped into Judge Staton’s courtroom for Girardi’s trial. The court makes no attempt to communicate with journalists about arrangements, and we were barred from using electronics even in the overflow room for opening statements.
Then I heard last week that Judge Mark Scarsi is going to allow laptops for note-taking purposes in Hunter Biden’s trial next month. That’s great, but it’s difficult not to feel like the courthouse is rolling out the red carpet for a decisively Washington, D.C.-based case when a very decisively Los Angeles-based case isn’t being covered like it could be because journalists are relegated to taking notes only by hand.
What a bummer.
Meanwhile, Judge Edward Davila allowed laptops and live transmissions during Elizabeth Holmes’ trial, just like Judge James Selna in Santa Ana does for all his cases, including the upcoming OMG Girlz v. OMG dolls retrial and the big Masimo v. Apple trade secrets showdown and, of course, Avenatti’s trial in 2022.
Federal prosecutors cited my coverage of Avenatti’s trial when asking Judge Staton to order witnesses not to read social media coverage of the trial. Turns out her restrictions make it impossible for me to cover Girardi’s trial the way I covered Avenatti’s trial.
Despite the restrictions, my friends covering the trial are doing great work. Amanda Bronstad tweets updates every trial day, and Daily Journal reporter Devon Belcher has an article about Girardi arguing with Cross during a morning break in the cross-examination of Joseph Ruigomez.
“I was there,” Girardi told Cross, according to Belcer. “I know more about this stuff than you do. I was there. … Don’t treat me like that.”
“Yes, sir,” Cross told Girardi.
Girardi also said something when leaving the courthouse on Aug. 7, appearing to tell a cameraman “we’ll wait” when asked how things were going.
I plan to tweet more this week because there’s no testimony in the Young Thug / YSL trial in Atlanta to monitor, only attorney argument. (They’re back in session at 9 a.m. PT on Monday. I’ll be streaming on YouTube and sharing highlights on TikTok, where I expect to surpass 200,000 followers this week.)
Previous coverage:
In other news…
I made the mistake of going to the press conference about actor Matthew Perry’s death. It was totally packed and there was no cell service so I couldn’t tweet, and of course the indictment with all the details was released in the middle of the officials reading their near-monotone statements. Lesson learned!
Still, it’s an important case, and I was glad to talk about it on LiveNOW from Fox. It also reminds me of another federal criminal case against a doctor accused of distributing narcotics to addicted patients, some of whom died: United States v. Jeffrey Olsen.
That’s the 2017 case that U.S. District Judge Cormac Carney twice dismissed while protesting his bench colleagues’ pandemic-time ban on jury trials. The 9th Circuit U.S. Court of Appeals overturned Carney’s last dismissal in May and ordered the case assigned to a new judge.
Carney is now on senior inactive status (not fully retired as he first planned), and the case has been assigned to U.S. District Judge John Holcomb. The prosecutors include Assistant U.S. Attorney Brett Sagel, who prosecuted Avenatti. Trial is scheduled to begin on Dec. 10.
In the Perry case, two of five defendants have not taken plea deals. You can read more in the indictment.
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