Defense experts: Girardi testimony was a Hail Mary that didn't help

Tom Girardi's surprising decision to testify on the final day of his federal wire fraud defense and claim he decided to hold funds from certain clients for their own well-being raised more ethical questions than answers that will not likely persuade jurors to rule in his favor, outside attorneys who've been following the case said.

"The California ethics rules are very clear as to when the money's received, it's supposed to go to the client," McDermott Will & Emery partner Julian L. André said in a phone interview Friday.

Girardi repeatedly testified that he was told by his clients' family members not to hand over their settlement money because they would spend it on drugs. The defense presented no evidence that the clients were drug addicts.

Criminal defense attorney Dmitry Gorin, a partner at Eisner Gorin LLP, said it wasn't Girardi's place to "make a unilateral decision to just withhold the client's money. ... For him to say that he chose not to give a client money is, I think, not consistent with the law."

According to California Rules of Professional Conduct, Rule 1.15: "... unless the lawyer, and the client or other person agree in writing that the funds or property will continue to be held by the lawyer, there shall be a rebuttable presumption affecting the burden of proof as defined in Evidence Code 605 and 606 that a violation ... has occurred if the lawyer, absent good cause, fails to distribute undisputed funds or property within 45-days of the date when the funds become undisputed..."

On Thursday, Girardi took the stand and denied any wrongdoing that he withheld over $15 million from four former personal injury clients who retained Girardi Keese between 2010 and 2020 while some $70 million was being spent out of the firm's bank accounts to finance country clubs, luxury vehicles and his wife's entertainment company. U.S. v. Girardi et al., 2:23-cr-00047 (C.D. Cal., filed Jan. 31, 2023).

U.S. District Judge Josephine L. Staton has scheduled closing statements for Monday morning with the jury receiving the case in the afternoon.
Girardi swore to the court, "Every client got every penny they were supposed to get," despite testimony from two of the ex-clients that they have still not received the full sum of their settlements.

Joseph Ruigomez, the prosecution's first witness who suffered extensive burns in an accident, said it took him and his family more than six years - and only after taking legal action against Girardi - to recover the full sum of a $53 million settlement that was reached in 2013. However, Ruigomez said Girardi initially told him his case had settled for only $5 million. Among the excuses he said Girardi gave him for years was that the money couldn't be sent to him because it was pending approval from the mediator.

Girardi testified he never withheld information from any of his clients and the mediator in Ruizgomez's case was "strict to say money had to be spaced out to an 18-year-old with a drug addiction. That's all there is to it." He also said he was told by Ruizgomez's mother to hold the money.

Ruigomez and his mother testified that while he was recovering in the hospital, his body temporarily developed a reliance on painkillers. However, both testified it never created a drug addiction and they never gave Girardi permission to hold the funds because of it.

A second client, Judy Selberg, said she went through a similar process to recover the full sum from a $500,000 settlement throughout 2020. The excuses she said Girardi gave her for months was that her wrongful death claims were taxable and judges, unrelated to her case, had to sign her checks.

However, Girardi, who recalled Selberg by her last name, said her funds had to be held because he was told she had a drug problem and giving her all that money would kill her. He did not say who told him this.

It was thought to be unlikely that Girardi would take the stand as a major pillar of his defense was that he had been diagnosed with dementia and Alzheimer's disease and didn't have the mental capacity at the time to knowingly commit the alleged crimes.

However, the move to close his case with his testimony did not strengthen his position, observing attorneys said.

"It was a terrible idea for him to get up there and testify, but ... it was a Hail Mary that, you know, he was kind of forced into this position," Albertson & Davidson LLP partner Stewart R. Albertson said.

Louis J. Shapiro, a criminal defense attorney in Century City, said Girardi's "choice to testify was a very brazen one, but it also may have been reckless, depending on how the jury perceived his demeanor."

During his examination, Girardi never hesitated to answer questions from Assistant U.S. Attorney Ali Moghaddas when confronted with the allegations and insisted on his innocence. However, at times, he appeared confused about certain cases related to the indictment and claimed he did not see testimony and evidence from any of the four client victims over the past two weeks. He said he was not in the courtroom, though he was present every day's full proceedings.

He never left the courtroom, except for scheduled breaks, and was sometimes seen taking notes while witnesses were testifying. He was also seen arguing during a morning break with Federal Defender Samuel O. Cross on the trial's second day, shortly before cross-examination of Ruigomez began.

In his testimony he often deflected blame on his firm's former financial chief, severed defendant in the case Chris Kamon, as "the guy from accounting" who Girardi said cleverly stole millions of dollars from him behind his back for years.

Shapiro said that although Kamon should share responsibility for the alleged crimes, that did not excuse Girardi's purported ignorance of the situation. "At the end of the day, Kamon's an employee of Girardi. ... He can't stick his head in the sand and say, 'It's my accounting department's fault.' ... You're dealing with clients' money in the trust account. That is sacred to an attorney."

At one point during Girardi's examination, he was asked to recall his early years as a young attorney and the success he had at his firm. He told jurors about "the Erin Brockovich case," a successful lawsuit against Pacific Gas & Electric Co. that was the subject of an Oscar-winning movie starring Julia Roberts.

In other instances, Girardi claimed he did not know who his defense team was and believed his law firm, which closed at the end of 2020, was still operational.

As Moghaddas ended his cross-examination, he referred to Girardi as "one of the best plaintiff lawyers to have ever existed."

With a smile on his face, Girardi responded, "That's awfully nice of you. ... Can I have a copy of that last question?"

Albertson said he interpreted these exchanges as somebody who displayed the ability to know right from wrong. "He has the ability to have a sense of humor. People with dementia and Alzheimer's, they generally lose their ability to pick up sarcasm and humor right away. ... Here they are putting him on the stand, and he's articulating things that I believe a capacitated person can express."

Taylor & Ring LLP partner David M. Ring shared that view.

"Girardi took the stand knowing he needed to save himself, but I don't think it was enough to overcome the prosecution's case with overwhelming evidence that he defrauded his clients and committed wire fraud," Ring wrote in an email. "Girardi came across as having a pretty darn good memory about a lot of things. That does not help him in front of a jury, which has been told by the defense that he essentially has dementia. Quite a contrast between what they were told and what they saw. I think the defense lost credibility on that issue."