Girardi’s Indicted. What’s Next?

On Feb. 1, 2023, The U.S. Attorney’s Office out of the Central District of California and Northern District of Illinois announced indictments on former plaintiffs’ personal injury lawyer Thomas Girardi. Charged with him is the former CFO of the firm, Christopher Kamon, and Girardi’s son-in-law, David Lira. It is alleged that, from 2010 to December 2020, the defendants fraudulently obtained more than $15 million that belonged to Girardi Keese clients.

In summation, they are accused of misappropriating client settlement funds. Clients were told that their money was on the way or delayed for made-up reasons and was really used for other purposes.

The following are quotes from the US Attorney’s Office out of the Central District of California:

“Mr. Girardi and Mr. Kamon stand accused of engaging in a widespread scheme to steal from their clients and lie to them to cover up the fraud,” said United States Attorney Martin Estrada. “In doing so, they allegedly preyed on the very people who trusted and relied upon them the most – their clients. Actions like the ones alleged in the indictment bring disrepute upon the legal profession and will not be tolerated by my office.”

“Mr. Girardi and Mr. Kamon allegedly created a mirage over several years in order to disguise the fact that they were robbing Girardi Keese clients of large sums of money” said Amir Ehsaei, the Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The defendants exploited the hardships endured by their clients and took advantage of their unfamiliarity with the legal process while they denied victims what was rightfully due to them in order to fund their lavish lifestyles.”

“Thomas Vincent Girardi should have been a pillar to our community. Instead, he is accused of creating an elaborate scheme to mislead his clients, victimizing them for a second time,” said Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation’s Los Angeles Field Office. “Attorneys are put in a position of trust when they represent us during some of our most difficult times. Mistrust in the legal profession grows when clients can’t trust their attorneys to pay them the settlements intended to make them whole. IRS Criminal Investigation, along with federal prosecutors and our law enforcement partners, will continue to seek to keep the legal profession honest.”

In the Illinois case, it’s alleged that Girardi and his former CFO misappropriated more than $3 million in settlement funds intended for relatives of victims killed in the crash of Lion Air Flight 610.

The following are quotes from the U.S. Attorney’s Office out of the Northern District of Illinois:

“The substantial misappropriation alleged in this indictment compounded the grief and anguish of the clients who lost loved ones in the Lion Air crash,” said U.S. Attorney Lausch. “Attorneys who violate the trust of their clients and breach a fiduciary duty that is paramount to the practice of law must be held accountable.”

“The victims of this crime placed their faith in their attorneys during a time of great vulnerability,” said FBI SAC Wheeler. “Taking advantage of victims of tragedy is a despicable act, and we will continue to seek justice for anyone who takes advantage of innocent Americans in their hour of need.”

This case presents the opportunity to revisit how the white-collar federal criminal justice system functions. In state prosecutions, the defense attorney and prosecutor often make a deal and the judge goes along with it. The federal system is different. In a federal case, the defense attorney and federal prosecutor will agree on a guideline range, but at sentencing, the defense will try to persuade the judge to depart from that range by presenting various types of equity-based arguments. While the sentencing guidelines are supposed to be “advisory,” judges give them a lot of weight.

To calculate the relevant guideline range, we first identify the base offense level. Wire fraud, which is the charge in play, is valued at 7. The amount of loss to victims is then added, and any amount above $9.5 million but lower than $25 million is 20. A 27 plotted on the United States Sentencing Guideline Table comes out to 70-87 months. And that is before adding additional possible sentencing enhancements. Therefore, Girardi realistically is facing 10+ years in federal prison if he is convicted.

The challenge for prosecution is to be able to prosecute Girardi in light of the fact that he has been diagnosed with Alzheimer’s disease. His defense attorney will likely argue that his client is incompetent to stand trial and criminal proceedings will remain suspended indefinitely. That will leave the former CFO and son-in-law David Lira to bear the brunt of Girardi’s actions.

The Girardi story is the quintessential “truth is stranger than fiction” paradigm. No one understands how such a successful trial attorney experienced such a fall from grace. While criminal proceedings may begin to shed light on the answer, what Girardi was truly thinking will likely forever remain a mystery.