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Democrat donor indicted in alleged embezzlement scheme

By Sarah May on
 February 2, 2023

The Department of Justice announced Wednesday that former attorney and major Democratic Party donor Tom Girardi was indicted by a California grand jury on five counts of wire fraud in connection with the alleged embezzlement of over $18 million in client funds, as Fox News reports.

  • Girardi, 83, was also charged in Illinois this week with eight counts of wire fraud and four counts of criminal contempt of court over a similar scheme to divert over $3 million in client settlement proceeds stemming from the 2018 crash of a Lion Air flight in order to keep his now-defunct law firm afloat, according to the Chicago Sun-Times.

Embezzlement scheme alleged

The manner in which Girardi – together with his law firm's former controller and CEO, Christopher Kamon – defrauded legal clients out of millions of dollars was spelled out in a press release issued by the U.S. Attorney's Office of the Central District of California.

According to the Justice Department, Girardi would set about negotiating personal injury settlements on behalf of clients but would subsequently misrepresent their actual terms and conceal key facts about the receipt and disposition of proceeds.

Girardi – aided by Kamon – would deposit settlement funds into attorney trust accounts to which he had access, and the pair would regularly withdraw money from them for improper uses, including repaying prior clients whose settlement funds had also been misappropriated and covering firm payroll and personal expenses.

To prevent clients from discovering the truth of what was happening, the duo made false representations that included claims that settlement funds had never been received, that judges had not yet authorized disbursement, and that liens had yet to be satisfied from the proceeds. Girardi and Kamon also stand accused of sending “lulling” payments characterized as “advances” on full settlement amounts.

“Widespread” fraud

In outlining the charges leveled against the men, U.S Attorney Marin Estrada explained, “Mr. Girardi and Mr. Kamon stand accused of engaging in a widespread scheme to steal from their clients and lie to them to cover up the fraud.”

Estrada continued, “In doing so, they allegedly preyed on the very people who trusted and relied upon them the most – their clients. Actions like the ones alleged in the indictment bring disrepute upon the legal profession and will not be tolerated by my office.”

Tyler Hatcher, special agent in charge of the IRS Criminal Investigation Field Office in Los Angeles stated, “Thomas Vincent Girardi should have been a pillar to our community. Instead, he is accused of creating an elaborate scheme to mislead his clients, victimizing them for a second time.”

“Attorneys are put in a position of trust when they represent us during some of our most difficult times. Mistrust in the legal profession grows when clients can't trust their attorneys to pay them the settlements intended to make them whole. IRS Criminal Investigation, along with federal prosecutors and our law enforcement partners, will continue to seek to keep the legal profession honest,” he added.

Prolific political donor

As Fox News notes, prior to his own massive legal troubles, Girardi was a powerful player in Democratic Party circles, forging strong relationships with politicians ranging from mayors to governors, senators to presidents, spending lavishly on fundraisers and contributions along the way.

According to a review conducted by the Los Angeles Times, Girardi, his family members, and his employees gave at least $7.5 million in combined political donations in recent cycles, with the lion's share of the funds designated for Democratic candidates, including President Joe Biden.

Not only did Girardi host a splashy Los Angeles fundraiser for Biden during his 2020 campaign, he also gave heavily to liberal California Gov. Gavin Newsom and made sizable contributions over the years to former President Barack Obama, former Secretary of State Hillary Clinton, Sen. Dianne Feinstein, and a plethora of other state, federal, and local officials.

Though Fox News sought comment from the White House amid news of Girardi's indictment, officials referred the network to the Democratic National Committee, which did not offer an immediate response.

Dramatic downfall

In addition to his heady connections to political powerhouses in California and beyond, Girardi also gained national notoriety as a result of his marriage to reality television personality Erika Jayne of Real Housewives of Beverly Hills fame, though the two are now in the process of divorcing.

Back in 2020, Jayne was sued by two colleagues of Girardi who accused her of “aiding and abetting” her husband's embezzlement scheme, as Fox News noted separately, but in the end, she prevailed in the case and subsequently initiated a dissolution of the marriage.

Prior to her legal victory, Jayne made public reference to Girardi's alleged infidelities, including a reported affair with a former judge for whom he was said to have purchased a beachfront condominium. “I knew about jewelry, shopping sprees, and plastic surgery, but this really threw me for a loop,” she said, upon learning of the real estate transaction.

Girardi was disbarred in California last summer and ordered to pay restitution to clients from whom he stole, and now that he is facing charges that could bring decades in prison, it appears that his downfall from the dizzying Hollywood heights he once occupied may be close to complete.