Girardi conviction only a step toward preventing similar abuses, some say

Tom Girardi's successful prosecution is only the beginning of a long process to restore trust with the public and legal profession and guard against more egregious cases of attorneys stealing their clients' and co-counsel's money.

On Wednesday, Sen. Thomas J. Umberg, chair of the state Senate judiciary committee, condemned the disbarred plaintiffs' attorney and his misconduct, while acknowledging the work to better protect the public from such abuse is far from finished.

"We have worked hard over the last few years to put backstops in place to ensure that this sort of abuse doesn't happen again, but it will continue to take all of us moving forward to keep a diligent eye on justice and protecting Californians," read a statement from Umberg, D-Santa-Ana. "I hope Girardi's conviction provides some small amount of consolation to the countless victims of his crimes. The fact that he was able to prey upon those who were injured and trusted him for so long was a hard lesson for all of us in the legal profession."

In the years since Girardi's misdeeds were first brought to light and Girardi Keese was shut down at the end of 2020, Umberg led the charge for ethics reform at the State Bar by writing measures such as SB 40 - which increased legislative oversight of the bar's discipline system. It also requires attorneys to report colleagues who they know have cheated clients, schemed or engaged in acts of treason, sedition or insurrection. The bill was passed in 2023.

Umberg also was the author of SB 211, passed in 2021, which made changes to the bar's annual discipline report and required the agency to establish and report on processing goals for discipline cases that, among other things, took into account factors such as public protection and case complexity. The bar's failure to make any public disciplinary report on Girardi in 40 years - while he entertained and gave gifts to State Bar judges, board members and staff - was the impetus for the Legislature and California Supreme Court to make new accountability requirements for the bar.

Bernard Alexander, of Alexander Morrison + Fehr LLP, said Girardi's prosecution has already changed the legal profession.

"By all outward appearances, now the State Bar is hyper-vigilant in addressing even perceived violations. Opening of new trust accounts or transfers of balances now require reporting. If a check gets returned on a trust account, even through no fault of the attorney is involved, the State Bar is all over it, making written inquiries and seeking assurances that there has been no wrongdoing," Alexander wrote in an email.

The demand for ethics practices revision intensified following the release of two investigative reports by the bar last March that detailed the agency's mishandling of more than 200 complaints against Girardi that resulted in no discipline. The reports explored numerous financial and social connections Girardi maintained.

Following Girardi's uncontested disbarment in 2022, two years after his firm collapsed, the bar vowed to strengthen its policies and public protection mission.

Following a three-week trial in Los Angeles, Girardi was finally brought to justice on four counts of wire fraud for misappropriating more than $15 million in settlement money from four clients between 2010 and 2020. The 85-year-old faces a maximum of 80 years in prison, pursuant to the federal wire fraud statue. U.S. District Judge Josephine L. Staton scheduled a sentencing hearing for Dec. 6. U.S. v. Girardi et al., 2:23-cr-00047 (C.D. Cal., filed Jan. 31, 2023).

The case was prosecuted by Assistant U.S. Attorneys Scott Paetty and Ali Moghaddas. Girardi's counsel - Federal Defenders Charles J. Snyder, Samuel O. Cross and J. Alejandro Barrientos - declined to comment on the jury's verdict. However, it is anticipated the defense will use Girardi's old age and purported frail mental health to appeal and lessen the punishment, attorneys unrelated to the case commented.

"I imagine that issues relating to his capacity to stand trial are going to be front and center, in any sort of appeal that's likely going to be the primary focus," Julian L. André, a partner at McDermott Will & Emery, said in a phone interview.

Michael S. Weinstein, a former federal prosecutor, said that under 18 U.S. Code 3553, the defense will likely argue there are several factors that should keep Girardi out of prison, "if that's essentially a death sentence at his age, and things like that. They're then going to try to not have him imprisoned during the period that they appeal."

However, Mark S. Sedlander of Mancini Shenk LLP - a former federal public defender - said Staton may look past Girardi's health factors and deliver a lengthy prison sentence based on the nature of the crimes he committed, and his violation of the trust of severely injured or grieving clients.

"The loss amount appears to have been many millions of dollars. This alone would lead to a sentencing guidelines range of quite a few years, even for someone without any prior convictions," Sedlander said. He added that aggravating factors, such as the use of sophisticated means to commit an offense and substantial hardship to vulnerable victims who were susceptible to criminal conduct, may also play a role in the sentencing.

"The judge will likely consider the implications of a lengthy prison sentence for someone of Mr. Girardi's advanced age and that he does not have any prior criminal convictions, if that is the case. But those personal characteristics likely will not outweigh the egregious nature of the offense, the victims' vulnerable state, Mr. Girardi's abuse of his position of trust, and the high dollar amount of the misappropriated funds," Sedlander said.

Girardi's defense attorneys throughout the trial said that his firm's financial chief, Christopher Kamon, was the one to blame for clients not being paid. The federal defenders said Kamon siphoned off millions from the law firm, taking advantage of Girardi's age, ill health and cognitive disabilities. However, the jury did not buy it as the government presented evidence that revealed direct communications Girardi had with clients, giving specific reasons why their money wasn't being sent between 2013 and 2020.

Girardi testified every client got paid what they were owed, and he never withheld their money unless there were specific requests from their family or other holdbacks such as vendor liens. However, this conflicted with the prosecution's evidence of Girardi's communications at the time, when he told clients he was awaiting judge signatures for checks and resolving purported personal injury tax issues.

"His choice to testify clearly ... did not help his case and the evidence was too overwhelming," Weinstein, of Cole Schotz PC, said.

Dmitry Gorin, a partner at Eisner Gorin LLP, said the jury rightfully found Girardi's testimony uncredible. "The lies that he told to his clients for years really made an impact on this jury and they refused to accept his mental health decline as an excuse to not paying people what he owed them."

André said the government attorneys excelled in how they presented their case because it made it nearly impossible to disprove. "The government did a very good job of tying, basically, each false statement to Girardi himself. Given that Girardi was the one providing false information to his clients or other lawyers at his firm, it was hard for the defense to turn around and say that it was really someone else responsible for taking this money."