Tom Girardi used client money to fund his wife's entertainment career, prosecutors say
Six weeks before Tom Girardi's criminal trial in Los Angeles is scheduled to begin, federal prosecutors revealed that they intend to introduce key evidence: that the disgraced former attorney allegedly spent more than $25 million of client and law firm money on the career of his reality TV star wife.
Until now, Erika Girardi — a mainstay of Bravo's "Real Housewives of Beverly Hills" — has rarely been mentioned in her estranged husband's federal prosecution. Tom Girardi — once a superstar plantiffs attorney and influential Democratic Party donor — and his law firm's former chief financial officer are accused of stealing $15 million from several clients in a years-long scheme.
In a court filing Friday, prosecutors said they plan to show the jury evidence that Tom Girardi misappropriated far more than that from his law firm, Girardi Keese, and his clients, including the $25 million they allege he diverted to cover the "illegitimate expenses" of EJ Global LLC, a company he formed for his wife's entertainment career.
"By directing Girardi Keese accounting personnel to make these payments for the benefit of EJ Global, defendant [Tom] Girardi knowingly and intentionally funneled payments sourced from client funds for the improper personal enrichment of his family members," prosecutors wrote in their filing.
No underlying evidence was included in the filing, and it's unclear how prosecutors plan to prove their assertion. They did not mention Erika Girardi by name, nor did they accuse her of wrongdoing or knowledge of her husband's financial practices.
Instead, prosecutors want to rebut Tom Girardi's defense strategy of blaming the CFO by showing that Girardi was also misappropriating money to spend on his wife and her career.
Read more: Tom Girardi and Erika Jayne: What to know
Erika Girardi's lawyer, Evan Borges, emphasized that prosecutors did not say the "Housewives" star did anything wrong and claimed that it was "undisputed" that Tom Girardi and his firm handled the finances and accounting of EJ Global LLC.
"She had no knowledge of the actions of Tom Girardi or Girardi Keese regarding client matters or finances," Borges said, noting that one judge already dismissed a suit against her because of "ZERO evidence" of her involvement in client matters.
"Years ago, Erika filed for divorce and separated from Tom Girardi, and lives in a rental," Borges said in a statement. "She is entitled to move on with her life."
Prosecutors want to bring in the evidence related to Erika Girardi's company, EJ Global, because of what Tom Girardi's attorneys revealed at a hearing on Thursday. Deputy Public Defender Charles Snyder indicated at the hearing that the defense will point a finger at the law firm's CFO, Christopher Kamon.
Snyder said his client wasn't the one "running the machine" — it was Kamon, who oversaw the firm's accounting department and 127 bank accounts.
In a separate federal prosecution, Kamon is charged with allegedly running a "side fraud" in which he embezzled millions from the law firm using sham vendors, then spent the funds on home renovations, exotic cars and “female escorts," according to court papers. Kamon, who has pleaded not guilty in both cases, faces a second trial in October for the so-called side fraud.
Girardi's legal team plans to cite the alleged "side fraud" by the CFO as a cause for large deficits in Girardi Keese's accounts.
Further, they plan to argue that Girardi was liquidating his personal assets and putting those funds back into the firm for payroll and expenses to offset money depleted by Kamon's alleged scheme.
Read more: Tom Girardi's epic corruption exposes the secretive world of private judges
In court Thursday, Snyder said that Girardi's lies to clients about the whereabouts of their settlement money — what prosecutors called "lulling communications" meant to fend them off — were not meant to swindle victims but to permit Girardi himself to get to the bottom of his firm's finances.
Kamon's attorney, Michael Severo, poured cold water on the narrative: "It's just fiction," he said in court.
With Girardi's lawyers suggesting that they'll shift culpability onto Kamon, prosecutors wrote in their filing that evidence of money misappropriated to pay EJ Global's bills is "essential" to telling "a coherent and complete story of the charged scheme."
"Excluding such evidence would only serve to distort the truth and leave the jury with the mistaken impression that only defendant Kamon is to blame for such misappropriation when, in truth, defendant Girardi similarly misappropriated tens of millions himself," the prosecutors wrote.
Girardi and Kamon are scheduled to go on trial together on Aug. 6. But late Friday, Girardi's attorneys moved to try them separately, in part because their defense strategies are "mutually exclusive."
That is, Girardi's lawyers believe that each man will blame the other. They plan to argue that Kamon wanted to cheat and deceive his boss and exploit an elderly man facing cognitive decline. They also predict that Kamon will claim he was "pressured" into acting at Girardi's command, according to court papers.
Read more: Tom Girardi declared competent to stand trial
Whether to try the two men separately, or to allow evidence of improper payments to Erika Girardi's limited liability company, will be decided by U.S. District Judge Josephine Staton, who previously ruled Girardi competent to stand trial.
Staton will also rule on a motion filed late Friday by Tom Girardi's legal team, which asks the judge to suppress evidence provided to prosecutors by the bankruptcy trustee overseeing Girardi's law firm, saying that a search warrant was never sought to obtain the firm's internal files and records.
Girardi’s lawyers have argued that the 85-year-old, who resides in the dementia ward of a nursing home, has no short-term memory and does not recognize them or remember the criminal case against him.
But in her ruling earlier this year, Staton said Girardi "clearly understands the nature of the charges against him."
Girardi was once a titan of the American legal community who won billions of dollars in settlements for clients in a career that spanned five decades. A landmark payout to residents of Hinkley, Calif., by Pacific Gas & Electric and its subsequent portrayal in the film "Erin Brockovich" helped raise Girardi's public stature. But he was long an insider in California politics, raising sums for governors, senators and legions of local Democratic politicians.
His firm collapsed in late 2020 as evidence emerged that he had misappropriated millions of dollars of settlements that Boeing had paid to widows and orphans of an Indonesian plane crash. The money never reached the families, prompting a federal judge in Chicago to freeze Girardi's assets and refer him for criminal investigation.
Girardi and his firm were forced into bankruptcy, and since then, scores of former clients have come forward alleging they did not receive all or part of their settlements.
Girardi and his son-in-law David Lira, along with Kamon, also face federal criminal charges in Chicago in connection with the misappropriation of $3 million from the Indonesian plane crash victims.
A trial in Chicago is scheduled for 2025.
This story originally appeared in Los Angeles Times.
