Bar seeks forensic financial auditor, chief trial counsel says

Responding to criticism that the State Bar ignored signs plaintiffs' attorney Thomas V. Girardi was stealing from clients, Chief Trial Counsel George S. Cardona said the agency will begin a search for an experienced forensic financial auditor in the new year.

"As a result of looking into the Girardi case, one of the things we are looking at right now is putting out an announcement to try to hire a financial auditor for our office," Cardona said in an interview Wednesday. "We didn't have one before, so we're trying to hire a more experienced financial auditor who has financial fraud experience."

Less than three months into the job, Cardona, a former federal prosecutor in Los Angeles, also spoke about his efforts to improve the attorney discipline process.

The bar suspended Girardi's license in March, three months after a federal judge in Chicago froze his assets over allegations he had misappropriated $2 million in client funds owed to families he represented in the Boeing 737 MAX Lion Air Flight 610 crash in Indonesia. By then, more than 100 clients had sued the former powerhouse plaintiffs' attorney.

Girardi has not been convicted of stealing client money. His lawyers have said he has Alzheimer's disease, and he is now living in an assisted living facility.

By June, State Bar officials acknowledged they had mishandled complaints about Girardi going back for years.

Cardona said in the interview that there were allegations Girardi covered up his thefts by moving money around multiple trust accounts, creating a trail that was difficult to follow. He also acknowledged that many people felt Girardi's connections to the bar, judges and politicians protected him for years.

One key role for the new auditor will be to help other investigators determine what kinds of records to subpoena, Cardona said.

"The purpose is to get someone on board who can do the more complicated financial analysis," Cardona said. "We do have a number of investigators in our office who have the experience, but we want to get someone who is dedicated to that and can serve as an office resource including the other investigators who do not have the same experience. ... We have done contracts with forensics auditors to do that type of work where appropriate in particular cases, but I think it makes sense to have someone in house."

Cardona has personal experience prosecuting financial fraud. He was with the U.S. Attorney's Office for the Central District of California from 1991 to 2018. He rose to become chief of the Major Frauds Section and did two stints as acting U.S. attorney. The bar named Cardona to his current job overseeing attorney discipline in August, but he didn't start work until October.

Financial crimes are one of the primary sources of complaints and disbarments, Cardona said, but they also cause a disproportionate amount of harm to clients.

The California State Auditor has subjected the State Bar to a series of unflattering audits, particularly focused on the attorney discipline system. In April, the agency found that the processing time for attorney discipline grew 56% between 2015 and 2020, while the case backlog nearly doubled. That report also noted this roughly coincided with the bar "converting its discipline staff from specialists to generalists" in 2016.

"The 2016 reorganization was made in response to comments that potentially the specialization was slowing things down," Cardona said. "That's one of the things we're looking at: Should there be more specialization, perhaps for certain types of cases?"

He said he doesn't have a position on ideas under discussion in the bar's Closing the Justice Gap Working Group and the Paraprofessional Program Working Group. The working groups comprise unpaid attorney volunteers whose activities are separate from the discipline arm of the bar.

"If there were a new set of paraprofessionals, there would have to be some form of disciplinary system," Cardona said. "We would need more resources to handle that."

Cardona said he expects an active back and forth with the Legislature in 2022. Under SB 211, a new law written by Senate Judiciary Chairman Tom Umberg, D-Santa Ana, the bar must submit new case processing standards to the Legislature by Oct. 31. Umberg wrote a provision in an earlier version of the bill that would have withheld funding until the bar filled the vacant trial counsel position, but removed it when the bar appointed Cardona.

"We need to restore public confidence that we are in fact doing the kinds of cases we should, that we are willing to go after the larger cases, and that when we do go after those that our decisions are being made for the right reasons," Cardona said.