Girardi argues with attorney in wire fraud trial

"I was there," disbarred plaintiffs' attorney Tom Girardi argued with his attorney Wednesday during a morning break before cross-examination of the first witness in his $15 million federal wire fraud trial.

"I know more about this stuff than you do. I was there. ... Don't treat me like that," Girardi could faintly be heard saying to Federal Defender Samuel O. Cross in the nearly empty courtroom.

"Yes, sir," Cross responded, as the attorneys walked back to their table.

The exchange occurred after completion of direct testimony by the first former client who said he fell victim to Girardi's alleged fraud schemes during the final decade of his legal career.

The witness, Joseph Ruigomez , told jurors that because he "boasted all the time" about his high-profile successes as a plaintiffs' injury attorney, there was no reason to believe Girardi would later cheat the client out of millions of dollars in promised settlement funds.

While under direct examination by Assistant U.S. Attorney Ali Moghaddas, Ruigomez said Girardi never delivered on a promise to pay him $5 million, in addition to annuity payments and interest, from a 2013 settlement with the Pacific Gas & Electric Company over a gas pipe explosion at Ruigomez's home in 2010 that left him in a coma for two months and killed his girlfriend.

Additionally, Ruigomez said the true nature of the settlement, which was for $53 million, was hidden from him and his family for six years until he successfully sued Girardi and his now-defunct law firm, Girardi Keese, to recover the missing money in 2019 and consulted a financial adviser.

Ruigomez said he trusted Girardi "a lot" when he retained him in 2010, based on his reputation. Girardi became famous - and a go-to plaintiffs' attorney for major cases - after his work helping to achieve a $333 million settlement for residents of the town of Hinkley after PG&E allowed a toxic metal to infiltrate their wells in the Mojave Desert. The case was the main plot of the 2000 movie "Erin Brockovich."

Ruigomez said he never questioned the lack of documentation and infrequent communication regarding the complete brief of the gas company's settlement. "I thought [the $5 million figure] was accurate and I was satisfied with it," Ruigomez said. "I had a lot of confidence considering the accolades ... and trusted him very much so."

Ruigomez said he suspected "something sketchy was going on" when he and his family had only received "fractions" of the promised settlement in the years following the agreement.

Cross then questioned Ruigomez about the scope of his knowledge of the 2013 agreement, showing him a general release that he and his family signed, which listed the $53 million figure and its breakdown. However, Ruigomez said that although his signature was on the document, the pages that listed the settlement figure were not shown to him at the time.

Cross produced documents that listed breakdowns of the agreement, which showed that after the Girardi Keese firm took its portion of the settlement, 25%, Girardi and Robert W. Finnerty - who is now with ACTS Law LLP, but represented Ruigomez at Girardi Keese at the time of the gas company lawsuit - only owed him a net payment of around $10 million. Ruigomez said the $10 million payment was ultimately honored in 2019 before his litigation against the defunct law firm.

The rest of the settlement was agreed to be honored by the Berkshire Hathaway life insurance company through annuity payments that Ruigomez said he still receives today.

Ruigomez said it should not have taken so much time to receive Girardi's portion of the agreement.

Moghaddas, during direct examination, raised a theory that the money was never completely available because Girardi was spending it to maintain a lavish lifestyle for himself and his wife. Girardi also spent a large amount of money entertaining lawyers, judges and State Bar employees, providing gifts and private airplane rides.

The indictment on four counts of wire fraud stems from allegations that Girardi misappropriated over $15 million in settlement funds from multiple former clients between 2010 and 2020 to support the opulent lifestyles of himself and his wife, an entertainer known as Erika Jayne. U.S. v. Girardi et al., 2:23-cr-00047 (C.D. Cal., filed Jan. 31, 2023).

Between 2013 and 2019, Ruigomez said, although he and his family sent multiple emails to Girardi and his staff regarding updates about the settlement money and agreement, they never received straight answers.

In several instances, Ruigomez said, Girardi would place blame on the mediator, the late California Supreme Court Justice Edward A. Panelli.

"Whenever I would ask for money, [Girardi] would use Justice Panelli as a middleman. ... He would tell me he can't give me my money unless Panelli signed off on it," Ruigomez said.

Ruigomez also said Girardi would "always butter me up and call me 'babe' and stuff like that," to offer reassurance and keep the client from getting mad.

In response to a 2019 email Ruigomez sent to Girardi about missing checks, Moghaddas played jurors a voicemail Girardi left where the defendant was heard saying, "Don't be mad at me" three times.

Later in the day, Ruigomez's mother, Kathleen, testified that Girardi was "very friendly ... always boasting about his connections" until pressed with questions. "He would be like, 'Don't be mad at me, aren't I doing a good job?" she said.

Whenever he scheduled in-person meetings with Girardi, Ruigomez said the encounters were always short because "he always had to go somewhere" and the conversations would "always be about his latest accomplishments. ... nothing about payments."

Cross ended his cross-examination by asking Ruigomez if he had ever considered who was responsible for accounting of the finances at Girardi Keese, alluding to the firm's former financial chief and severed defendant in the case, Christopher Kamon.

He responded "no," and Cross said he had no further questions.

During opening statements Tuesday, Cross told jurors the defense's evidence would prove how Kamon saw an opportunity to take advantage of "an old man" with "serious cognitive decline" in his ruse to steal over $50 million from the firm without Girardi knowing.

Mrs. Ruigomez testified there were a series of emails she sent to the law firm where Girardi wasn't copied in. Most of these were with Finnerty, who at one point in 2013 told her he lost their retainer agreement and needed her to sign it again, Mrs. Ruigomez testified.

Sometime later, she said she was "shocked" to see consent forms that detailed the $10M that was owed to her son, rather than the $5 million they expected.

"What you really discovered is Bob Finnerty lied to you," Cross said.

Explaining why the family sued Girardi Keese for the rest of the $10 million, Mrs. Ruigomez said that the final $5 million had been sent to an incorrect address so they did not know Girardi had eventually sent it.

That lawsuit against Girardi Keese settled for an additional $12 million in 2019. In 2020, The family was paid only $1 million of that through the bankruptcies of Girardi and the law firm.

Cross again pressed her about Finnerty.

She said she was "persuaded" by Finnerty (who was at ACTS at the time) in 2019 to sue Girardi Keese for the missing money. The family then sued ACTS in 2023 to recover additional attorney fees.

The second witness was Judy Selberg, who retained Girardi in 2019 after a Lake Havasu boating incident killed her husband. She sued the owner of the boat, who was not the driver, and the case settled for $500,000. After attorney fees, Girardi said she would be owed around $300,000.

Selberg received an email from Alexa Galloway at Girardi Keese in June 2020 that the firm received the check. However, Selberg said she was only paid portions of it in the months thereafter.

Whenever she would ask about where the money was, Girardi would say he had to meet with judges to get it signed off, Selberg testified. She said this back and forth "would go on and on and on" for months before she finally took legal action.

When asked if Girardi seemed confused, Selberg said, "He was not confused. He would just say he's in this process of getting with this judge to give me my money."

She said she eventually received a $50,000 personal check from Girardi and another $100,000 payment later. But she was never paid more than half of what was promised.