Tom Girardi fraud trial begins: Liar? Or victim?

Tom Girardi in a light blue sweater and a sportjacket

Aug. 7, 2024 6:32 AM PT

Tom Girardi was on a first-name basis with senators from California to North Carolina.

The governor was on speed dial. And legions of state and local officials lined up for his boozy parties in Beverly Hills, Las Vegas and elsewhere.

Yet in few places did the once-legendary plaintiff’s attorney wield as much power as the courtrooms in the heart of Los Angeles, where he swayed juries with his honey-smooth voice and untold judges attributed their appointments to the bench — at least partly — to Girardi’s blessing.

On Tuesday, one of those downtown federal courtrooms was the site of the latest low point in Girardi’s long descent from legal titan to disgraced and bankrupt ex-attorney as jurors were sworn in and his criminal trial began.

Girardi stands accused of four counts of wire fraud for allegedly looting $15 million from clients over a decade.

With the 85-year-old sitting quietly in a blue sweater and gray plaid blazer next to his defense team, Assistant U.S. Atty. Scott Paetty said Girardi “lied to his clients, stole from them, violated their trust, broke the law.”

Those clients had all turned to him in moments of tragedy — a burn victim, a widow whose husband died in a tragic boating incident, a woman injured by a medical device, and another woman harmed in an auto accident — and he won them settlements. The prosecutor said the problem stemmed from how he handled the money.

“By lying and stealing millions upon millions of their settlement dollars, the defendant repeatedly chose himself,” Paetty said.

“That money did not belong to the defendant,” he said. “It belonged to the victim clients, and it should be promptly paid to the victim clients.” The prosecutor tautly detailed how money belonging to a lawyer’s client must remain safeguarded in a special bank account.

“He treated that client trust account like a personal piggy bank,” Paetty said.

Two private jets. Jewelry. Country club fees. A mansion in Pasadena and a home in Palm Springs. Paetty said that the funds pocketed from clients underwrote an exorbitant lifestyle and that an additional $20 million from the firm’s bank account went to the entertainment career of his now-estranged wife, Erika Girardi, star of “Real Housewives of Beverly Hills.”

But Girardi’s defense team dismissed the prosecutor’s account as a fictional Hollywood plotline that inaccurately cast its client as the villain. Samuel Cross, deputy federal public defender, invited the five women and seven men on the jury to see Girardi as a once-mighty lawyer whose later years were marred by progressive dementia, disorganization at his law firm, Girardi Keese, and a large-scale theft by the firm’s chief financial officer, Christopher Kamon.

In essence, it was Girardi who was being defrauded, Cross asserted.

Kamon quietly pocketed more than $50 million from his boss through a variety of transactions — checks to sham companies, payments to friendly vendors, $23 million in American Express card charges, the defense attorney said.

As a result, Girardi had to pour $80 million of his own money into Girardi Keese.

“He’s trying to keep this firm afloat,” Cross told jurors. “Why is the firm sinking? Because Chris Kamon is stealing money.”

Cross returned repeatedly to the complexity of the law firm’s operations from 2010 to 2020, the period at the center of the case.

In that time, more than $1 billion flowed through Girardi Keese in 300,000 transactions across 175 bank accounts. As the person overseeing the books, Kamon held unique power to gradually siphon off money to pay his girlfriend $20,000 per month and buy homes in L.A. and, later, the Bahamas.

“This boring detail is how Chris Kamon makes the theft happen,” Cross added.

Prosecutors have also charged Kamon with wire fraud and separately charged him with engaging in a “side fraud” in which he diverted millions of dollars from the firm. He’s pleaded not guilty in both cases and is scheduled to be tried next year. Both men face another trial in 2025 in Chicago on charges that they stole payouts made by Boeing to families whose loved ones died in an Indonesian plane crash.

Prosecutors have long expected Girardi to push blame onto Kamon.

In his opening statement, Paetty told jurors that the amount allegedly stolen by Kamon was “a fraction” of the amount Girardi is accused of taking and that, regardless, it was Girardi — not Kamon — who was lying to clients.

By way of example, Paetty played jurors a voicemail from about 2020 in which Girardi tells one of his clients, Josefina Hernandez, that her settlement payment was delayed because of a court order.

“I don’t want you upset,” he told Hernandez in the recording. “I know you are and I don’t blame you.”

Paetty told jurors that “there were no more orders that needed to be signed.”

“These were lies — his lies — and Josefina Hernandez never saw a penny of her settlement,” he said, promising jurors they would hear other voicemails, and view emails and letters that he said further show Girardi’s role in defrauding clients.

“You will be able to see for yourselves how much the defendant knew about his clients’ cases,” Paetty said.

Since the collapse of Girardi’s firm in late 2020, his lawyers have asserted he is in the grip of cognitive decline, and that continued Tuesday. Cross said witnesses throughout the trial would testify that Girardi’s personal hygiene had gone by the wayside, that the lawyer made famous by the film “Erin Brockovich” had stopped recognizing people he’d known for years, that he would reread the same emails multiple times and repeat himself in conversation.

The mental decline, Cross said, occurred over the decade at issue in the case but accelerated after a 2017 car accident. By 2020, Girardi Keese had devolved into chaos, and even Girardi fell victim to “a bizarre elder abuse scheme” by an unnamed person in which he thought he was working as a secret government attorney, the defense claimed.

“Tom is not just losing a step,” Cross said. “He’s falling off a cliff.”