Girardi sentenced to 7 years in prison for $15M in client fraud

Once one of California's most powerful trial lawyers, Tom Girardi was sentenced Tuesday to 87 months in federal prison -- a stunning downfall for the disbarred attorney who built his name fighting for the injured but spent the twilight of his career stealing from them.

Marking his 86th birthday, Girardi stood in a Los Angeles courtroom as U.S. District Judge Josephine L. Staton handed down the sentence for a years-long scheme that diverted more than $15 million in settlement funds from vulnerable clients.

"I think it's clear there was negligence involved, but everybody got everything they were owed. ... Indeed, it was bad that mistakes were made. ... I don't make a salary. I just work," a frail Girardi told Staton before his sentencing.

Outside the courtroom after the hearing, when asked by reporters if he wanted to say anything about his sentence, Girardi smiled and said, "I guess not," before being walked to the elevator by assistants of the Federal Public Defender.

It was a sharp fall for a man who once mingled with presidents and governors while claiming to champion the downtrodden -- a contradiction not lost on those who investigated and prosecuted him.

"This self-proclaimed 'champion of justice' was nothing more than a thief and a liar who conned his vulnerable clients out of millions of dollars," U.S. Attorney Bill Essayli said in a statement.

As for other former Girardi Keese attorneys or staff who may have helped their boss carry out the years-long fraud scheme, Essayli said after the hearing that his office "has looked and is looking into anyone and everyone involved." However, there may be some statute of limitations of obstacles regarding some of those investigations, he noted.

"He's not only a disgraced attorney, he's now a convicted felon and a soon-to-be inmate of the Bureau of Prisons. We hope that today's sentence brings some solace to the victims," Essayli said about Girardi outside the courtroom after the sentence was read.

Staton delivered the 71/4-year sentence Tuesday morning after a jury last year found Girardi guilty of orchestrating a theft scheme that cheated four injured clients of their settlement funds during the final decade of his legal career.

"Mr. Girardi ... victimized these people and did so when they were at the lowest point in their lives. Instead of fighting injustice by the powerful, he was the one with all the power. And he wielded it against vulnerable victims to further line his already overflowing pockets," Staton said.

"He used his reputation of success to take advantage of these victims."

The judge ordered Girardi to surrender by July 17, to pay a $35,000 fine and more than $2.3 million in restitution.

The Department of Justice, led by Assistant U.S. Attorney Scott Paetty, had sought 14 years for Girardi's four wire fraud convictions. Staton reduced the recommended penalty after considering Girardi's age and health. However, she said those factors, alone, weren't enough to evade a custodial sentence because of his position and how he abused that power to harm vulnerable victims while he continued to live the high life.

"We are here today because of Tom Girardi's lies and his total failure to uphold the solemn responsibility that he held as an attorney to put his client's interests above his own," Paetty told Staton.

"Not only did he lie to his clients, but he lied to this court when he tried to hide behind his mental decline, claiming incompetence. He lied to the jury ... and he lied today when he stood before this court and said 'everyone got everything they were owed,'" Paetty continued.

"This defendant thought he could get away with it because he spent a lifetime persuading people to agree with him. And he was good at it, one of the best."

In a statement, California Senate Judiciary Committee Chair Tom Umberg said: "Justice for Tom Girardi's victims was finally served today. Unfortunately, Mr. Girardi's seven-year sentence won't relieve the pain or restore the money or undue stress suffered by the thousands of people that he preyed upon."

In the wake of the Girardi scandal, Umberg, D-Santa Ana, led the charge for ethics reform at the State Bar by writing measures such as the attorney misconduct reporting rule and bills that increased oversight on arbitration and the bar's discipline system.

"This entire case has been a hard-learned lesson for all of us in the profession," Umberg's statement continued.

"The lack of oversight, and failure to discipline Tom Girardi decades ago, allowed him and his co-conspirators to victimize far too many Californians. This debacle has sounded the clarion call to reform attorney discipline, and I hope our efforts over the last few years will protect Californians from unscrupulous attorneys going forward."

Akil Davis, the assistant director in Charge of the FBI's Los Angeles Field Office, said: "Mr. Girardi, once a self-proclaimed 'legal legend' who purported to fight corporate greed, will now find himself on the opposite end of justice as he serves out his lengthy prison sentence.

"Years of hard work went into this case by agents and prosecutors motivated to pursue justice for the victims who were betrayed by Girardi after putting their trust in his corrupt law firm in their time of need and while enduring personal hardship," Davis said.

The sentencing came a day after Girardi's bid to be admitted to a mental hospital in lieu of imprisonment failed. Although she acknowledged Girardi's diagnosed dementia was worsening, the judge did not find it to be severe enough to warrant specialized care outside the federal prison system because he still demonstrates a baseline ability to perform daily life activities.

California will be the final stop for the once powerful attorney as a similar wire fraud indictment in Chicago was dropped by the government last month. In that case, he was accused of stealing millions of dollars that The Boeing Co. paid the families of people who died in an airline crash in Indonesia.

In the Los Angeles case, Girardi and Christopher Kamon, his defunct law firm's financial chief, were convicted and sentenced to prison over wire fraud. U.S. v. Girardi et al., 2:23-cr-00047 (C.D. Cal., filed Jan. 31, 2023).

Girardi's counsel, led by Deputy Federal Defender Charles J. Snyder, argued throughout the trial that Kamon was the one to blame for clients not being paid. They argued Kamon siphoned off millions of dollars from Girardi Keese, taking advantage of Girardi's age, ill health and cognitive disabilities.

Girardi's attorneys maintained his innocence for nearly two years. In a surprising move to testify on the trial's last day, Girardi told jurors, "Every client got every penny they were supposed to get," and he never held their money back unless they asked him to - for reasons such as drug addictions - or there were unpaid medical liens.

However, the jury didn't buy Girardi's story after weeks of testimony from the victims and their families about how he would constantly tell them they couldn't get paid because of issues such as pending judge approvals or his fixing of purported tax laws that unfairly targeted women.

In one instance, the string of excuses lasted more than six years, and the true sum of a $53 million settlement was hidden from the victim's family client until they sued Girardi and his firm years later. That victim, Joseph Ruigomez, said Girardi told him the settlement was for $7 million and that he received only hundreds of thousands of dollars in the years since the agreement was made in 2013.

"What was supposed to be a path to recovery turned into a nightmare," Ruigomez told Staton.