Pandemic and failing health caused mounting debt, Girardi's secretary testifies

In the months before his law firm collapsed, Tom Girardi was "up to his neck in debt" and using law firm money to pay personal expenses, his longtime secretary testified Tuesday at the former plaintiffs' attorney's federal wire fraud trial in Los Angeles.

Shirleen Fujimoto, who worked for Girardi for 26 years, told the jury that the law firm's problems were complicated by the fact that the pandemic had shuttered courts and businesses, and that Girardi's mental health was failing.

"He would tell me to take money from this particular case ... take our costs or fees," Fujimoto said. In situations where the firm was maxed out in its portion of a certain settlement, he would say, "'I'll get back to you,'" she said.

The financial problems exploded into public view in late 2020 as clients and creditors began filing lawsuits over unpaid settlements and debts. Girardi and his law firm were forced into bankruptcy in January 2021.

Fujimoto testified Tuesday that Girardi had relied "heavily" on her to handle his business communications and personal accounting. She said he did not use a computer and would instead dictate emails and letters to her. She said those tasks became increasingly difficult throughout 2020 as Girardi's memory worsened. He misplaced documents and would sometimes get clients confused. Although he could carry on a conversation, "he would repeat himself quite a bit," she said.

Fujimoto, a defense witness, told the jury that she hadn't noticed these problems until the final years of Girardi's career. Clients began calling and emailing, almost daily, to ask about missing settlement checks, she said. At the same time, several of Girardi's personal bank accounts were levied, she said.

At first, Fujimoto said Girardi would tell her, "Everything is fine, S. We've got money coming in." However, as the debt grew, she said she frequently sat down with him to come up with plans for paying debts. She said that he would tell her to ask accounting to transfer funds from Girardi Keese's operating accounts to his personal banking accounts.

A neurologist diagnosed Girardi in 2021 with late-onset Alzheimer's disease. But throughout the trial, which began Aug. 6, prosecutors have sought to portray him as a thief who was stiffing clients long before any mental health issues arose. They point to more than $15 million that they say he pilfered from clients between 2010 and 2020. And an IRS agent testified Monday that he found at least $70 million in law firm money that Girardi used for personal expenses during those years.

The money, prosecutors allege, was used to fund a lavish lifestyle that including private jets and fabulous parties - and the myriad extravagances including jewelry and clothing that his wife, the entertainer known as Erika Jayne, flaunted as a member of the cast of "The Real Housewives of Beverly Hills."

In addition to the civil lawsuits, Girardi faces the ongoing prosecution in Los Angeles and a similar one in Chicago, where he is accused of stealing money from the families of people who died in an airline crash. U.S. v. Girardi et al., 2:23-cr-00047 (C.D. Cal., filed Jan. 31, 2023) and U.S. v. Girardi et al., 1:23-cr-00054 (N.D. Ill., filed Feb. 1, 2023).

Assistant U.S. Attorney Ali Moghaddas asked Fujimoto if she had been aware that Girardi had not paid more than $3 million owed to the families of 189 people killed in a 2018 Boeing Co. airline crash in Indonesia.

She said she didn't know.

Moghaddas then played for jurors voicemails Girardi left in December 2020 for Jay Edelson, his co-counsel in the airline litigation, who told a federal judge about the unpaid settlement funds.

"Mr. Edelson, this is Tom Girardi calling. I saw your fraudulent allegations here. This is really terrible. I think we have clearance to send the money out. Call me....," Girardi said in one voicemail.

"Jay, don't be bad to me. I'm a nice guy and I don't want to have any problems here. ... And if there is some negligence here ... as the head of the firm, it's my fault. ... Let's work something out," he said in the second.