Girardi's mental health likely star witness as first criminal trial begins

Although Tom Girardi was found competent to stand trial, his mental capacity during the time he is accused of stealing $15 million from several clients will likely be central to the defense as his first prosecution unfolds in a federal courtroom in Los Angeles over the next two weeks.

"One of their best arguments is that he doesn't have the capacity to understand what he did or even intentionally do it," Michael S. Weinstein, a former federal prosecutor who is not involved in the case, said.

Attorneys for Girardi, who is 85, say their client was diagnosed in 2021 with late-onset Alzheimer's disease and dementia. But that was after Girardi's consumer law firm, Girardi Keese, collapsed amid allegations of fraud and unpaid debts.

U.S. District Judge Josephine L. Staton earlier this year rejected the defense claims that their client is too mentally incapacitated to stand trial. But criminal law experts said that did not foreclose bringing up Girardi's health and deteriorating health during the trial, or as a mitigating factor at sentencing, if he is convicted.

"The judge already looked at whether or not he's competent to stand trial ... that doesn't mean that during the course of the defense case, they can't present him as an older, infirmed type of individual," Weinstein said.

"You can be found competent to stand trial, but not have the requisite intent to commit a crime," agreed Louis J. Shapiro, a criminal defense attorney in Century City.

Weinstein, of Cole Schotz PC, said the first clue as to how the defense might put on its case is how Girardi is dressed when he shows up for the first day of court on Tuesday.

"The first thing to look for is whether or not he shows up in a suit and tie or he walks in like a homeless person. That's going to play off his mental health issues. ... They don't want him to be a slick LA lawyer. They want him to look elderly," he said.

Girardi was disbarred after the allegations came to light. His lawyers -- Federal Defenders J. Alejandro Barrientos, Charles J. Snyder and Samuel O. Cross - have said in court filings that they would not assert a diminished capacity defense, but instead argue that Girardi had not formed a culpable state of mind sufficient enough to establish the elements of the alleged fraud to the former client victims in the case.

After Staton ruled that Girardi was competent to stand trial, the defense lawyers presented newly surfaced emails in which Girardi Keese employees talked about their concerns that Girardi was "less than coherent" and had trouble receiving and retaining case information.

The indictment on four counts of wire fraud stems from allegations that Girardi raided at least $15 million in client settlement funds between 2010 and 2020 to support the opulent lifestyles of himself and his wife, Erika, an entertainer and member of the cast of "The Real Housewives of Beverly Hills" television show. U.S. v. Girardi et al., 2:23-cr-00047 (C.D. Cal., filed Jan. 31, 2023).

The case is being prosecuted by Assistant U.S. Attorneys Ali Moghaddas and Scott Paetty.

Shapiro said the prosecutors likely already have plans to counter the diminished capacity defense.

"The prosecution is going to argue, 'Well, even though [Girardi] may not have deteriorated now, he was in a much better mental state back then,'" Shapiro said. "But all the jury is going to be looking at is an individual who does not look like he's in very good health right now, both physically and mentally. That could be what the defense is banking on."

Federal wire fraud charges usually require significant prison time, but Shapiro said that might not be the case if Girardi is convicted, considering his advanced age.

"There's no way a judge can ignore the fact that if someone's up there in age and is in poor health ... the Board of Corrections may not be the best position to help somebody like this," Shapiro said. "It's very unusual. Somebody who was healthy, even if they're up there in age, might be looking at some serious time, but I think a judge would be very conflicted in a sentencing in this type of case."

Weinstein said Girardi's case is "unusual because it's not often you have an 85-year-old committing these types of financial crimes that exist here."

However, he added, as a former lawyer, he may be held to a higher standard than others. "I think the judge is going to hold him in a higher degree of responsibility and trust because he knew, as a lawyer, that you're entrusted with clients' money and there's a high standard to be entrusted with that."

Whatever happens in the Los Angeles case, Girardi's legal jeopardy is far from over.

He faces a similar indictment - along with his son-in-law and former Girardi Keese attorney David R. Lira, and the law firm's former chief financial officer Christopher Kamon - in the Northern District of Illinois. The Chicago indictment stems from allegations the three stole more than $3 million in settlement funds intended for the families of 189 people killed in a 2018 Boeing Co. airline crash in Indonesia. U.S. v. Girardi et al., 1:23-cr-00054 (N.D. Ill., filed Feb. 1, 2023).

During a status conference earlier this year, U.S. District Judge Mary M. Rowland in Chicago scheduled a March 2025 trial date for Lira and Kamon. However, she paused the proceeding against Girardi until a verdict was returned in the California case.