Girardi bought wife $750K earrings with client money, trustee says

The estranged wife of disgraced plaintiffs' attorney Thomas V. Giradi might have to give up a pair of $750,000 diamond earrings after the trustee in his Los Angeles bankruptcy case said the jewelry was purchased with stolen funds.

Trustee Elissa D. Miller of SulmeyerKupetz filed a motion to turnover personal property Tuesday, asking U.S. Bankruptcy Judge Barry Russell to demand Erika Girardi surrender diamond earrings, now estimated to be worth $1.4 million.

Tom Girardi, once one of the most high-profile plaintiffs' lawyers in the nation, is accused of stealing millions of dollars from personal injury clients. Creditors forced him and his law firm, Girardi Keese, into bankruptcy last year.

According to Miller, Tom Girardi in 2007 issued a check for $750,000 to an M&M Jewelers, drawn from a client account held by Girardi Keese. At the time, the law firm was holding settlement funds for clients suing a pharmaceutical company over alleged liver damage caused by the diabetes drug Rezulin.

"Not only did Girardi steal money from the GK client trust account to buy the diamond earrings, he covered up the theft by describing the purpose of the check as a 'cost' of litigation incurred by the firm in the prosecution of the 'Rezulin,' mass tort, complex litigation cases in which GK functioned as 'lead counsel,'" Miller wrote.

Responding in an opposition motion less than 24 hours later, Erika Girardi's attorney, Evan Borges of Greenberg Gross LLP, said his client "is completely innocent."

Erika Girardi, a star of the Bravo TV series, "The Real Housewives of Beverly Hills," said she didn't know where Tom Girardi got the money to purchase the jewelry before she "innocently received a gift of earrings," Borges said.

"I am disturbed by everyone jumping to conclusions about Erika, who is innocent, and trying to blame her for the actions of others," Borges said in an email Wednesday. "If the law matters, the trustee's motion is completely out-of-bounds."

Beverly Hills attorney Ronald Richards, who until recently represented Miller in the bankruptcy, said it doesn't matter if Erika Girardi didn't know the source of the money her husband used to purchase the earrings. Since the earrings were bought with funds stolen from the client trust account, Tom Girardi could not have legally transferred title to the earrings to Erika Girardi, Richards said.

"What matters is whether the goods were bought with other people's money," Richards said. "By using the trust account for a fraudulent purpose - meaning Thomas Girardi falsely claimed it was a case cost - that specific purchase was made with money that should have gone to the client."

Tom Girardi stated in a 2012 letter that a pair of $800,000 diamond earrings were stolen from his and Erika Girardi's home in 2007, according to Miller's motion. Girardi immediately replaced the earrings, purchasing a similar style piece from M&M Jewelers for $750,000.

Despite Tom Girardi stating he bought the new earrings using money from a $19 million Comerica line of credit, the replacement earrings were in fact paid for with a check drawn against the Rezulin mass tort client fund, and co-signed by then Girardi Keese partner, James O'Callahan and Tom Girardi, according to Miller. She said Tom Girardi listed the money he used to buy the earrings as a litigation "cost" in the official Rezulin litigation ledger.

The ledger further evidenced that Girardi Keese paid itself $15 million as repayment for "costs" and another $7.5 million for fees, according to Miller's motion. After showing evidence to Borges, Miller demanded Erika Girardi turn over the earrings, but as of Tuesday, the reality star has failed to do so, according to the motion. In re: Girardi Keese, 20-BK21022 (C.D. Bankruptcy Ct., filed Dec. 18, 2020).

Responding Wednesday, Borges said Erika Girardi is willing to "hold and not transfer or sell the earrings" and will provide them to a third party escrow to be held until Russell rules on the matter, according to the opposition motion.