Disgraced attorney Tom Girardi ran “a massive Ponzi scheme” to defraud his clients of millions of dollars, a prosecutor told jurors Monday on the final day of the now-disbarred attorney’s nearly three-week trial in federal court in Los Angeles.
“He acted with the intent to defraud; he knew what he was doing,” Assistant U.S. Attorney Ali Moghaddas said in his closing argument before the case against Girardi, the ex-husband of Real Housewives of Beverly Hills star Erika Jayne, went before the jury for a verdict.
‘He lied to his clients over and over again about why they weren’t getting paid. He lied to them because he didn’t want to give them their money because they had already spent it.
“Behind the scenes, he stole his clients’ money. It was cruel to treat his victims in this way.”
Tom Girard, 85, is accused of running a “massive Ponzi scheme” to defraud clients of millions of dollars.
Girardi, 85, is charged with four counts of wire fraud in which he is accused of defrauding clients out of $15 million in settlement funds they were owed for injuries they suffered. He has pleaded not guilty to all charges.
The one-time super lawyer, who looked tired and somber Monday and dressed in a blue-and-white striped shirt, khaki pants and the same rumpled gray jacket he wore for much of the trial, built the powerhouse law firm Girardi Keese after his fight against a California utility giant inspired the Oscar-winning film Erin Brockovich.
But his high-flying career came crashing down in 2020 when he was accused of stealing millions in settlements he had won for victims of the 2018 Lion Air plane crash in Indonesia.
The allegations from that crash, which killed 189 people, are the basis for other criminal charges against Girardi that are still pending in Chicago. Girardi has also pleaded not guilty to those charges.
Federal prosecutors say that between 2010 and 2020 the disgraced lawyer — who faces 20 years in prison if convicted — lied to his clients and used their embezzled millions to pay for his own lavish lifestyle of “private jets, luxury cars, expensive jewelry and exclusive golf and country club memberships” with his third wife, former go-go dancer Jayne, 52, including $20 million to fund her acting career.
The former attorney and ex-husband of Real Housewives of Beverly Hills star Erika Jayne is charged with four counts of wire fraud in which he allegedly defrauded clients out of $15 million in settlement funds they were owed for injuries they suffered from clients of his law firm between 2010 and 2020.
Meanwhile, when he took the witness stand last week, Girardi denied any wrongdoing, stating that “every client got every penny they were supposed to get.”
And he blamed his law firm’s chief financial officer, Christopher Kamon, 49, for looting victims’ settlement funds, embezzling some $50 million.
His defense team has insisted that Girardi is mentally unfit to stand trial and that his advanced dementia prevented him from understanding that Kamon was stealing from his company.
Kamon has been charged with wire fraud similar to Girardi’s, but is being tried separately. He is also accused of embezzling $10 million from Girardi Keese, which is now bankrupt and $100 million in debt. Kamon has pleaded not guilty to all the charges he faces.
Girardi testified in his own defense last week and denied wrongdoing, stating that “every client received every penny they were supposed to receive.”
In court on Monday, Moghaddas insisted that Girardi is as guilty of misleading his clients as Kamon.
“There is no question that Mr. Kamon is guilty,” she told the jury, made up of seven men and five women. “But today is not Mr. Kamon’s day, it’s Tom Girardi’s day. And to say that Kamon did it is not valid.”
Was it Kamon who was lying to clients? Was it Kamon who was hiding documents? Was it Kamon’s name that was on Girardi Keece’s door?
While Moghaddas acknowledged that Girardi’s mental state may have worsened, he scoffed at the defense’s claim that it was his dementia that caused him to not realize his clients were being scammed in the decade between 2010 and 2020.
“The only mental state that matters is the one he was in when the crimes were committed, not the one he was in today,” he said. “Girardi was already defrauding his clients long before his mental decline.”
In his closing argument, defense attorney Charles Snyder countered by telling jurors that Girardi’s cognitive loss made him like the main character in the movie “Weekend at Bernie.”
‘He grew old, he became ill, he lost his mind. The lights were on but no one was home. He lost touch with reality.’
Girardi’s defense team has consistently argued that he is mentally unfit to stand trial due to cognitive impairment. However, a federal judge ruled earlier this year that he is competent to proceed with the case.
Describing Girardi’s declining mental abilities, Snyder said he “mixed up cases, didn’t recognize his wife, lost documents” and once thought he was then-Vice President Joe Biden’s secret personal lawyer.
Snyder said Girardi was overwhelmed with “hundreds of cases and thousands of clients.” “He didn’t pay much attention to what he signed. What he knew was what Mr. Kamon told him. He unwittingly signed off on Mr. Kamon stealing tens of millions of dollars.”
Describing Kamon as “a virtuoso, a Michael Jordan when it comes to lying and deceit,” Snyder said the former Girardi Keese CFO, who earned $350,000 a year in salary from the company, “walked away with between $50 million and $100 million.”
‘Mr. Kamon had unfettered access to Girardi Keese’s client trust accounts, which deposited $1.2 billion between 2010 and 2020, with virtually no oversight. The companies’ finances were entirely under Mr. Kamon’s control.
‘Mr Girardi did not knowingly participate in Mr Kamon’s fraud. He had no real idea what was happening with the company’s finances.
“But the remedy for mismanagement is bankruptcy (which the company did), not criminal charges.”
Jayne was spotted with her ex Girardi and his son Tommy Zizzo when he was still a child
Snyder told the court that when Girardi discovered Girardi Keese was losing money and was in danger of going under, he put millions of his own money into the company to try to keep it afloat.
It was unsuccessful and Girardi was left broke. “He lost more money than anyone else,” Snyder added.
In rebuttal to Girardi’s closing arguments, Assistant U.S. Attorney Scott Paetty called the case “a simple, sad story of violated trust and greed” in which the once-hotheaded attorney “was buying private jets (he owned two worth a total of $12 million) while his clients weren’t getting paid.”
Paetty mocked Girardi and blamed Chris Kamon for the massive fraud, saying that “Girardi took $14 million” from the company’s accounts before 2010, “which is when Kamon started at Girardi Keese.”
‘Girardi Keese was a den of thieves and Tom Girardi was the head thief. Girardi Keese was a house of cards built on Tom Girardi’s lies.’
As for the defense’s claim that Girardi’s mismanagement was partially responsible for the charges against him, Paetty said: “Disorganization and sloppy record-keeping are no defense against fraud.”
And on the defense’s argument that Girardi’s diminished mental capacity caused him to not realize Kamon was swindling millions, Paetty added: “Who knows what his mental state is today, but what’s important here is his mental state when he was lying to clients and stealing their money.”
Following the prosecution’s rebuttal, Judge Josephine Staton sent the jury back to the bench at 2:20 p.m. to begin deliberations.