Tom Girardi makes first court appearance after fraud indictment

For once, Tom Girardi was silent in court.

The disgraced legal legend did not utter a word Monday afternoon during an initial appearance in federal court in Los Angeles on charges of wire fraud that prosecutors have said was part of a long-running scheme to fleece clients.

Girardi, 83, sat stone-faced as a magistrate judge, a prosecutor and two public defenders appointed to represent him discussed the mental health of the once-powerful attorney, who was diagnosed two years ago with Alzheimer’s disease.

U.S. Magistrate Judge Karen Stevenson said she had reviewed filings submitted under seal by Girardi’s attorneys concerning his medical condition and concluded that there was “reasonable cause to believe the defendant may be suffering from a mental disease or defect” that would render him unable to understand the proceedings or assist his attorneys.

Stevenson entered a plea of not guilty on Girardi’s behalf to the five counts of wire fraud, which cover more than $15 million allegedly stolen from client settlement funds. She ordered the prosecutor and Girardi’s attorneys to begin competency proceedings that will include an evaluation by an independent medical expert.

The prosecution agreed to the testing, with Assistant U.S. Atty. Scott Paetty saying, “The government does not oppose it and understands competency will be an issue in this matter.”

In the meantime, Girardi will remain free. Stevenson said Girardi can continue in his current living arrangement — the memory care unit of an Orange County nursing home — without electronic monitoring such as an ankle bracelet.

“There will be no custody here,” Stevenson said.

Girardi’s younger brother Robert, who was appointed as his conservator two years ago, attended the hearing and agreed to sign an affidavit promising his brother’s appearances in the proceedings, on penalty of $250,000.

Asked by the judge whether he understood the responsibility he was undertaking, Robert Girardi, a dentist from Seal Beach, replied, “Fully aware of it, yes, your honor.”

The judge barred Girardi from selling or transferring assets valued at more than $5,000 without notifying the court.

What assets Girardi still has remain unknown. He has been forced into bankruptcy, with his residences sold and his belongings auctioned to pay creditors.

Defendants are normally required to turn over their passports. Supervising Deputy Public Defender Craig Harbaugh said Girardi — who once traveled by private plane with his wife, “The Real Housewives of Beverly Hills” star Erika — cannot find his passport.

“If it is recovered, it will be turned over,” Harbaugh said.

For decades, Girardi strode the halls of L.A. courthouses in neat suits with silk ties and matching pocket squares, but on Monday afternoon, he shuffled into the courtroom in a rumpled, plum sweater and baggy slacks. As the judge ran through the conditions he must abide by while awaiting further proceedings, Girardi absentmindedly stroked a tuft of his white hair.

He faces a second indictment next month in Chicago, where a grand jury indicted him; his son-in-law, attorney David Lira; and his former chief financial officer, Chris Kamon, on several counts of wire fraud stemming from $3 million misappropriated from a settlement with Indonesian widows and orphans.

In the Chicago case, Girardi is scheduled to appear remotely March 3 to answer charges, while Lira is set to appear remotely Friday for his arraignment. Kamon has been in federal custody since November after prosecutors charged him with running an alleged “side fraud” at Girardi’s law firm and accused him of embezzling millions to finance a lavish lifestyle.