Girardi's firm was legally due some of his clients' settlement money. Does it matter?
Girardi's firm was legally due some of his clients' settlement money. Does it matter?
Closing arguments are to begin this morning in the disbarred lawyer's federal fraud trial in Los Angeles. The jury could reach a verdict as soon as this afternoon.
Along with his mental state, Tom Girardi’s defense involves timing.
The disgraced ex-lawyer’s agreements with his clients guaranteed his law firm a chunk of their settlements, and a federal investigator agreed last week that money Girardi received from it was his money to spend as his wishes.
Internal Revenue Service Special Agent Ryan Roberson did not, however, agree that Girardi’s spending could have been illustrated through groceries and medical bills instead of country club memberships.
“Everyone has groceries and medical bills. Not everyone has country club fees to pay while clients aren’t getting paid,” Roberson told Deputy Federal Public Defender Charles Snyder, who asked him if he focused on country clubs to try to emphasize Girardi is “a rich guy.”
Roberson was talking about $50,000 the Girardi Keese firm paid Girardi from about $183,000 it took out of alleged client victim Judy Selberg’s $504,000 settlement in 2020. Under Selberg’s agreement with Girardi, the firm was due $200,000 in attorney fees.
“There’s nothing wrong with sending $50,000 to Mr. Girardi, correct?” Snyder asked.
“No,” Roberson answered.
“That’s how he gets paid, correct?” Snyder asked.
“Yes,” Roberson answered.
But under the wire fraud theory prosecutors are pursuing, Girardi’s refusal to pay his clients everything they were due at one time means any money they received afterward was meant to lull them so they could continue being defrauded.
The four wire fraud charges jurors will consider are for bank transactions beginning in 2019, but prosecutors allege the scheme began when he started representing the first client victim in 2010 and ended when his firm collapsed into bankruptcy in 2020.
Jurors won’t be asked to specifically consider the legality of payments to Girardi, but his lawyers hope they’ll see Girardi’s financial relationship with his clients as more complex than a straightforward fraud. Girardi said in surprise testimony on Thursday that his clients got what they deserved after the firm factored in “liens” and “holdbacks.”
Prosecutors have said the wire fraud scheme involved $15 million, but that number won’t become legally significant unless Girardi is convicted of wire fraud, then Judge Staton must consider the total loss amount associated with the fraud when she sentences him.
Before the 85-year-old took the stand, his star defense witnesses were former employees who testified about his declining memory and the problems the firm’s accounting department, as well as former friends of ex-firm accountant Christopher Kamon who testified about his thievery and lavish spending. A neurologist also testified about Girardi’s declining mental state, though she said she only analyzed his abilities after 2021.
Girardi’s lawyers won an early victory when U.S. District Judge Josephine Staton granted their motion to try Kamon separately from Girardi, and they referenced him throughout trial as the true swindler in the case.
They’ve also tried to cast suspicion on other firm employees, and they were allowed to elicit testimony from Roberson last week about who other than Girardi received a “target letter” from federal authorities indicating they were the subject of a criminal investigation. Assistant U.S. Attorney Scott Paetty objected for relevance, but Staton said he “opened the door” in his cross and overruled. Roberson then answered that Bob Finnerty, now of the ACTS Law Firm, had received a target letter, as had David Lira, Chris Aumais and Keith Griffin.
“I don’t know exactly who else,” Roberson testified.
Much of the defense’s cross-exam of Roberson focused on Kamon. His salary at Girardi Keese, which had $1.2 billion in revenue between 2010 and 2020, was $350,000 annually, but Girardi’s lawyers say he stole upwards of $80 million from the firm and lived an extravagant lifestyle that included expensive, international vacations, gambling trips to Las Vegas and a plan to escape to a beach home in the Bahamas that ended when federal agents arrested him after he flew into Baltimore, Maryland, in November 2022 with four cellphones and a large amount of cash.
According to testimony, Kamon owned several homes, including one in Palos Verdas and another in Encino that Snyder said he “bought and renovated to the absolute highest standards.” He also collected exotic cars, and his entrepreneurial endeavors outside Girardi Keese included owning a company that rented portable stripper poles. He embezzled enough to pay his former girlfriend Nicole Rokita $20,000 a month — she called it an “allowance” when she testified— and he paid for her to build a keto-friendly restaurant called Roketo that never opened.
Witnesses from competency hearing testify again
Other defense witnesses repeated testimony from Girardi’s mental competency hearing last year, including his former housekeeper of 20 years, Isabella Mancilla. Mancilla said she initially didn’t notice changes in Girardi after he was in a car crash in 2017, but then he started rewearing clothes, including socks with holes.
“Did they ever smell?” the defense asked.
“Yes,” Mancilla answered through a Spanish to English language interpreter
Before the crash, Girardi enjoyed baking chicken and making mashed potatoes and macaroni and cheese. “And after the accident, no longer,” Mancilla said. She said he couldn’t keep track of his doctor’s appointments, needed help with his medication and, in 2020, she hid his car keys from him “because he wanted to take off.” He stopped paying her in 2020, but she continued helping him three days a week because “I couldn’t leave him alone.”
“I saw he was bad off,” Mancilla said.
On cross, Paetty emphasized that Mancilla doesn't know what Girardi did in the office or what happened with the firm.
Girardi’s former travel agent, Amber Ringler, also testified similarly to how she did in the competency hearing but shorter and with more specificity, describing his declining memory and deteriorating manner of dress. She said she coordinated travel and events for the law firm for 24 years and “his wife and I became very good friends.”
“Erika and I are the same age, and we just hit it off immediately,” she said in cross-examination of Real Housewives of Beverly Hills star Erika Jayne.
Asked when she noticed Girardi change, Ringler said, “I’m not great with years” and estimated 2015 and 2016. She said he carried the same printed emails with him for years — he didn’t use a computer — and “read them again and again.”
Ringler said something about another attorney at the firm telling her they wanted Girardi evaluated, but Judge Staton sustained a hearsay objection and rejected the defense’s argument that there should be an exception for “present sense of impression.” Ringler also testified about taking Girardi to a hospital when he said he couldn’t hear. It turned out his hearing aides were stuck inside his ears. Girardi also “didn’t know what was going on” during a 2020 meeting with bankruptcy lawyers, Ringler said.
On cross, Assistant U.S. Attorney Ali Moghaddas showed an email from December 2019 about Girardi wanting to stay at the Wynn hotel in Las Vegas, and another from January 2020 about Girardi speaking at the West Trial Lawyers Associate Ski Seminar. Ringler implied Girardi didn’t have to do much: “People would write speeches for him and give him a piece of paper and he'd read them.”
Deputy Federal Public Defender Alejandro Barrientos asked in re-direct if Ringler would allow her relationship with Girardi to affect the honesty of her testimony.
“Absolutely not,” she answered.
Lawyer Richard Marmaro, a retired partner at Skadden, Arps, Slate, Meagher & Flom LLP, also testified via video about seeing Girardi at the 1st Street federal courthouse in early 2020. A security officer asked him if he knew who Girardi was “and I said of course, that is Tom Girardi. He’s a really prominent plaintiff's lawyer,” Marmaro testified.
Girardi was looking for the state civil courthouse and didn’t realize he was in federal court. Marmaro testified, “I think he recognized me, but I’m not sure.” Girardi called him “pal” but “that in and of itself was not extraordinary.”
“He looked to me to be confused,” Marmaro said. “Of course, I would have expected him to know where he spent his entire career.”
Marmaro also recalled Girardi forgetting about a golf tournament they were scheduled to play in in New York in fall 2019. He met him at the Jonathan Club in downtown Los Angeles later, and Girardi acted as if nothing was wrong.
“It was a very short drink because, quite frankly, I was upset that he hadn’t even apologized,” Marmaro testified. Then in 2020, Marmaro contacted Girardi after hearing about problems at his firm. Marmaro testified he wanted to let him know that “I was his friend, and I was concerned about him,” and Girardi ended up visiting Marmaro’s home. He looked “somewhat disheveled” and “seemed not to know why he was in my house.”
On cross, Paetty asked Marmaro if the person he knew was “a pretty impressive guy.”
“That’s an understatement. Tom was very impressive,” Marmaro answered. Marmaro said he didn’t believe he’d seen him in court, but was a guest on his radio show.
“Tom was a very special lawyer,” Marmaro said, calling him “one of the most talented lawyers I have ever known.”
Paetty asked if Marmaro knew of the four cases at issue in the indictment.
“I don’t believe I ever talked to Tom about the details of those cases,” Marmaro said. Marmaro also said Girardi “did repeat stories from time to time, but I personally didn’t connect that with any cognitive issue.”
‘He is a lonely soul, and not well’
Jurors also heard from Shirleen Fuigmotio, who was Girardi’s secretary for more than 20 years. She described him as “very kind, very charismatic,” and said they were busy at the firm but they “had fun times” and recalled him tossing her footballs in the office. Her job was “24/7.”
She cried when Snyder asked how it felt to see Girardi in court.
“Pretty sad,” she said.
Snyder asked why, but Judge Staton sustained a relevance objection, so Snyder moved on to asking Fujimoto about Girardi’s major cases before 2010. She named the mass torts case against Pacific Gas & Electric because “it’s the Erin Brockovich story,” referring to the 2000 movie. She also said he had big cases against Lockheed Martin and Sempra Energy and was on “the judge selection committee.” Snyder questioned Fujimoto about Kamon’s spending — Kamon is her son’s godfather — and he went through emails from late 2020 in which she discusses with another assistant, Kim Corey, Girardi sounding confused and being unable to find his keys.
“I made egg, hash brown and gave him a banana. Isabella is getting him a hamburger for lunch,” one email on Nov. 16, 2020 said. “I don’t know if he forgets as soon as we hang up the phone. So sad.”
Jurors also say Fujimoto grow increasingly frustrated in emails as the firm’s collapse began in December 2020.
She wrote in a Dec. 2, 2020, email, “I want to know who is in charge” and “I’m so worried as to who is going to take care of Tom.”
“He is a lonely soul, and not well. I’m in tears everyday,” she wrote.
Fujimoto also testified about Giraird obsession with the Phipps White family and an issue they had with the Hollywood Land Development Co. that he thought could be worth billions of dollars.
Jurors saw emails in which firm employees discussed blocking “Mr. Phipps from being able to email Girardi” because “he is a criminal” and said the family had no case. Prosecutors have emphasized that the case was not necessarily the scam the defense makes it out to be and implied that Girardi may have been fixated on it because he believed it could solve his financial problems.
Snyder also asked Fujimoto about a Dec. 2, 2020, email in which she asked for information on the firm's apparent transition to another law firm and wrote, “please ... please... this is very upsetting.” In a Dec. 7 email, Fujimoto said Baker was “coming over to talk to employees about how to secure” their salaries.
“We will all meet in the garage,” she wrote. “I don’t want Tom to see and question what is going on.
Later, Fujimoto wrote in another email, “Phil says I’m done and that I should not go in or talk to Tom.”
But when Snyder asked Fuijimoto in court if Girardi knew what was going on, she answered, “I really can’t tell you. I don’t really know.”
In cross, Moghaddas questioned Fujimoto about letters she dictated for Girardi in which he discussed their settlement money. He asked her about Girardi’s generosity with employees and his power over them, and he asked if they felt comfortable questioning him.
“No, he’s the boss,” Fujimoto said.
Moghaddas also questioned Fuigmotio about the timing of Girardi’s claimed inability to understand what was going on and the fact that it happened after a judge in Chicago wanted to talk to him about problems in the Lion Air plane crash case., referring to the contempt proceedings that publicly revealed Girardi’s alleged frauds.
Then Moghaddas played a voicemail Girardi left for attorney Jay Edelson, his co-counsel in the Chicago case, after Edelson accused him of fraud. Giraid said, “This is really terrible” and said something about sending money out that day.
“Jay, don’t be mad at me,” Girardi said. “I’m a nice guy. I don’t wanna have any problems for anybody.” The message was left on Dec. 27, 2020, weeks after Girardi had publicly claimed dementia and had his brother assume guardianship of him.
Snyder asked on re-direct if he could treat Fujimoto as a hostile witness under Rule 611 of the Federal Rules of Evidence, but Judge Staton said, “No, denied.”
Additionally, the defense intended to call as a witness Kim Archie, a former Girardi Keese employee who is friends with the Ruigomez family, to question her about her work expense reimbursement requests. Jurors have seen an internal firm email in which someone asks regarding Archie, “What incidentals? Gucci bags?”, but they never heard from Archie herself after the defense failed to properly subpoena her.
Girardi’s lawyers asked Judge Staton to issue an arrest warrant because Archie told them their subpoena, which was served by Girardi’s daughter, was deficient, but then they said the subpoena may have been missing the date.
“I don’t think I can issue an arrest warrant on a deficient subpoena,” Judge Staton said.
‘He was arrogant all the way through’
Another defense witness was Kamon’s lawyer, Michael Severo, who has watched the trial from the gallery each day, but he didn’t testify about his representation of Kamon.
Instead, he testified about representing a company called GSI Group in a lawsuit against Girardi over missing client money that was filed in May 2020 and settled a couple months later. Severo said he may have received a $15,000 payment from Girardi, but he then received a letter in which Girardi said “I will have an offer for you” regarding the case. Severo told Girardi he was “concerned” about the letter because the case had already settled.
“I want to make sure you are aware that we have already settled this case and your obligations under the terms of the settlement,” Severo wrote.
But on cross, Severo wasn’t helpful to the defense, telling Paetty he didn’t take Girardi’s letter to mean he’d forgotten the settlement.
“I felt he was trying to renegotiate our settlement,” Severo said. Paetty highlighted a portion of the letter in which Girardi told Severo they “can do this two ways” and either “try to get along,” or Girardi will file a cross-complaint. Severo said “bully is one way to put it.”
“He was arrogant all the way through, so this doesn’t surprise me,” Severo testified.
The defense also called as a witness Isidro Bravo, a construction company owner who enthusiastically testified about helping Kamon steal money from Girardi’s firm by submitting false invoices. Jurors saw invoices to Bravo’s Construction, including for $12,000, and $34,963, and checks that Bravo said he’d deposit and pay to Kamon as directed. Asked if there was a lot of money going in and out, Bravo said enthusiastically, “Yeaaah. Oh yeah.”
Asked if he knew Kamon’s ex-girlfriend Rokita, Bravo answered, “Yeah, she’s my homie, yeah,” Jurors laughed during his testimony, including when he got down from the stand and said, “Thank you everybody” as he walked by the jury box. He put on his cowboy hat but took it off again as if he realized he was still in the courtroom.
Other defense witnesses included Natalie Degrati, an investigator with the Federal Public Defender’s Office for the Central District of California, who testified about transactions she said related to Kamon’s fraud on the firm, and Kelly Winter Weil, who was a lawyer at Girardi Keese from May 2019 to May 2021. The defense asked her about an email alleged client victim Josefina Hernandez wrote in October 2018 in which she said she was “absolutely devastated by the settlement offer” of $65,000 in her lawsuit over injuries related to a medical device.
Weil forwarded the message in an internal firm email and wrote that she wished she’d known of Hernandez’s complaints “and could have thrown a little more money at her.”
The defense apparently displayed the email to show that Girardi wasn’t the firm’s client money, but the prosecutors used it as an opportunity to highlight Hernandez’s plight, with Peatty asking Weil on cross if Hernandez was entitled to her settlement money.
“If Ms. Hernandez received nothing from Girardi Keese, that would be improper?” he asked. Weil agreed Hernandez should have received her money.
“She should get whatever was left over at the end of the day,” Weil said.
‘He was able to distinguish right from wrong’
Prosecutors called two rebuttal witnesses: Jeffrey Isaacs of Isaacs Friedberg Zill LLP, who testified Thursday after Girardi, and Ryan Darby, a neurologist and assistant professor Vanderbilt University Medical Center who evaluated Girardi for his mental competency hearing.
Darby testified that Girardi had “mild cognitive decline” in late 2020, but he doesn’t believe he had dementia and believes he was capable of understanding right from wrong. He also testified that Girardi is “exaggerating or feigning” his mental decline “because he thought it might be helpful” to his situation.
Darby said when he interviewed Girardi in June 2023, “he denied being aware that he was involved in a legal case.”
Darby said the voicemail Girardi left for Edelson “demonstrates he’s able to understand his responsibilities to pay clients” and that “he was able to distinguish right from wrong.”
On cross, Barrientos asked Stone about neurologist and University of Southern California professor Helena Chui’s testimony that Girardi has dementia and Alzheimer’s.
Barrientos said Chui has more experience than Darby, and Darby answered that Chui is “older than me, yes.” Barrientos said Chui has been practicing since 1982, then he asked Darby, “What were you doing in 1982?” and Staton sustained a relevance objection.
Isaacs on Thursday testified about suing Girardi in 2014 over his misuse of client funds from a 2011 settlement. He demanded an accounting of all funds and filed a motion for civil contempt, and at no time did Girardi blame Kamon or anyone else at the firm for what happened.
“Did he blame mental impairment for not paying your clients 10 years ago?” Paetty asked. Isaacs said he wasn’t dealing with Girardi directly, he was dealing with lawyers representing his firm.
Isaacs also testified about the U.S. Attorney’s Office declining to pursue criminal charges against Girardi several years ago, which you can read about in my article on Girardi’s testimony.
Judge Staton reserved her ruling on the defense’s motion for judgment of acquittal under Rule 29, then told prosecutors at the end of court on Wednesday to respond to the defense argument that wire fraud charges must involve bank transactions with fraudulent intent.
Three of Girardi’s four charges are for transactions related to settlement payments and aren’t related to anything fraudulent he did with the money.
You can read prosecutors’ five-page filing here. The defense filed a seven-page memo you can read here.
Closing arguments are to begin today at 9 a.m. I’d say follow my Twitter for reports to keep up, but Judge Staton banned all electronics from her courtroom. Still, I’ll try to tweet updates about deliberations. I’ll email another article once the verdict is in.
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