Edelson Sues Girardi Agency Alleging $100 Million Fraud Plot (3)

The now-defunct Girardi & Keese regulation agency operated a unbroken legal enterprise that stole greater than $100 million from its purchasers, co-counsel, distributors, “and lots of others unlucky sufficient to do enterprise with the agency,” the Edelson PC regulation agency stated in a federal lawsuit.

Girardi & Keese allegedly siphoned off settlement funds to members of the family of plane-crash victims, girls who developed breast most cancers after taking hormone substitute remedy, and others who employed the plaintiffs’ agency, based on the lawsuit, filed late Wednesday. As an alternative of turning over awards to purchasers, tens of millions of {dollars} went to fund lavish existence of Thomas Girardi and his “Actual Housewives of Beverly Hills” spouse, Erika Girardi, the submitting stated.

“When the curtain was lastly pulled again, it grew to become clear that Girardi Keese operated in a fashion just like a Ponzi scheme, however a lot worse,” based on the US District Courtroom for the Northern District of California lawsuit.

Edelson served as Girardi & Keese’s native co-counsel for purchasers within the litigation over the 2018 crash of Lion Air flight JT 610. In December 2019, Edelson sued Girardi, Girardi Keese, and others to recoup its share of attorneys’ charges and to trace down Boeing Co. settlement funds Girardi & Keese nonetheless owes to a number of purchasers. Girardi collectors filed an involuntary Chapter 7 chapter petition in opposition to the agency.

Girardi & Keese collapsed inside days of Edelson submitting a contempt petition for cash stolen from Lion Air households, the lawsuit stated. Tom Girardi was disbarred in June, and the California Supreme Courtroom ordered him to pay $2.28 million plus 10% curiosity for funds stolen from purchasers.

Edelson alleges Girardi & Keese stole from purchasers; falsified case bills to justify stealing cash from purchasers; commingled stolen shopper funds; laundered stolen funds by the agency’s payroll account and American Specific playing cards; commingled cash from Tom Girardi and lenders into the shopper belief account to repay long-delinquent funds to purchasers; and paid non-attorneys, like case runners, unlawful money bonuses for referring purchasers, along with committing to pay them unlawful shares of the last word restoration.

“They was a regulation agency however sooner or later, they become a legal enterprise,” state Sen. Tom Umberg (D), California Senate Judiciary Committee chairman, stated Thursday.

Movie star Lawyer

Girardi was the agency’s founder and a star inside and out of doors the courtroom. He was considered by many as probably the most outstanding plaintiff’s lawyer within the nation, the lawsuit stated. “However contained in the agency’s doorways, the story was fully totally different.”

Edelson accuses Girardi & Keese of bribing former judges who allegedly allotted settlement cash between plaintiffs to supply a outcome Girardi & Keese needed. The lawsuit alleges Girardi Keese lied to, threatened, and/or bribed purchasers and attorneys “to maintain them quiet and forestall the scheme from collapsing.”

Edelson redacted the amount of cash it seeks, together with treble damages, restitution, attorneys’ charges, and punitive damages of at the least $55 million.

RICO claims up to now have been filed in opposition to regulation companies, “however that is, after all, a singular case,” Jay Edelson stated in a Thursday e mail. “We’re unaware of any swimsuit that alleges that the agency was basically a legal enterprise performing as a regulation agency. We’re assured that Tom orchestrated the biggest Ponzi-scheme within the historical past of the plaintiff’s bar, stretching again nicely over a decade (and certain for much longer) and involving a whole lot of tens of millions of {dollars}.”

David Freeman Engstrom, co-director of Stanford Legislation’s Middle on the Authorized Career stated Thursday that for years, “company defendants have tried, principally unsuccessfully, to deploy RICO in opposition to plaintiffs’ legal professionals for initiating allegedly bogus litigation. Most such fits had been doubtful, at finest, and advised RICO had no good place within the civil justice system. But when the allegations in opposition to Girardi show true, this RICO lawsuit appears to hit nearer to the mark.”

Girardi is reportedly mentally incapacitated.

Different Defendants

The lawsuit additionally names David Lira, a former Girardi Keese companion who now could be a member of Engstrom, Lipscomb & Lack, and is Girardi’s son-in-law. Lira didn’t reply to an e mail looking for remark, nor did Keith Griffin, a Girardi & Keese lawyer who now could be an affiliate at Dordick Legislation Corp.

Erika Girardi and EJ World LLC, a California restricted legal responsibility firm whose sole member is Erika Girardi are additionally named defendants. “EJ World was created for the aim of funneling cash from Girardi & Keese to learn Erika,” the lawsuit stated.

Evan C. Borges, a companion with Greenberg Gross LLP in Costa Mesa, Calif., Erika Girardi’s chapter counsel, on Thursday referred to as the lawsuit “one other misguided try and blame Erika for actions of Tom Girardi and others of which she had no data and by which she had no involvement.”

Attorneys with Levene, Neale, Bender, Yoo & Brill LLP representing the agency’s chapter trustee declined touch upon the lawsuit. Representatives for Girardi couldn’t instantly be recognized.

Additionally sued had been Christopher Kamon, Girardi & Keese’s chief monetary officer; George Hatcher, a non-lawyer “marketing consultant” who was accountable for referring the households of air crash victims; Hatcher’s Wrongful Dying Consultants; Joseph DiNardo; and Nardo’s California Lawyer Lending II, which allegedly lent cash to Girardi & Keese and bought a primary lower of settlement cash coming into the agency.

The submitting alleges violations of the federal Racketeer Influenced and Corrupt Organizations Act; conspiracy; mail fraud; wire fraud; cash laundering; participating in financial transactions in property derived from specified illegal exercise; obstruction of justice; transporting stolen items; and violating the California Unfair Enterprise Practices Act and California Penal Code for receipt of stolen property and aiding and abetting concealment of stolen property.

Bar Faulted

Regardless of years of complaints and allegations of fraud and mismanagement, “Tom maintained a spotless report earlier than the State Bar. The fraud thus continued, with solely the occasional glimpse of the rot contained in the Girardi & Keese agency,” the lawsuit stated.

Edelson alleges Girardi “cultivated the impression that not solely was he a profitable and highly effective lawyer, however he really managed the related authorities, together with the company charged with disciplining attorneys, the State Bar of California.” Girardi entertained bar officers at lavish events “and reportedly went as far as to bribe a longtime investigator on the State Bar,” the lawsuit stated.

The bar had no touch upon the lawsuit, stated Bar Govt Director Leah Wilson.

The State Bar Courtroom in March ordered Girardi on inactive standing and he was disbarred efficient July, Wilson stated in a Thursday emailed assertion. “The investigation, together with particulars of previous closed complaints and investigations, should stay confidential to adjust to the regulation and to present this investigation the best likelihood of success.”

California legal professionals are overseen by the California Supreme Courtroom, which finally disciplines and admits attorneys to observe on the bar’s suggestions, and the California Legislature beneath the state’s Enterprise and Professions Code.

Lawmakers for years have fought with the bar to enhance oversight. The bar “is accountable for self-discipline in opposition to Girardi and any lawyer engaged on this enterprise,” Umberg stated, including that the Girardi affair is a lesson for complaints remodeled 20 years that “solely lately got here to gentle and solely lately investigated.”

“It is a case research in how to not shield customers,” Umberg stated.

The case is Edelson PC v. Lira, N.D. Cal., No. 3:22-cv-03977, criticism filed 7/6/22.

Previous post An NYC lawyer made her Hamptons hospitality desires come true
Next post Elon Musk and Twitter lawyer up forward of a authorized battle in Delaware