The seizure of a pair of $750,000 diamond earrings as part of an elderly attorney’s Los Angeles bankruptcy has left his estranged wife demanding a payout for damages.
Tom Girardi, 84, and his Girardi Keese law firm were forced into Chapter 7 bankruptcy proceedings two years ago by a trio of attorneys and clients seeking to collect some $6.5 million.
Real Housewives of Beverly Hills star Erika Jayne believes the bling should never have been seized and sold off at auction for $250,000, but the bankruptcy trustee claims to have found financial records showing Mr. Girardi acquired the jewelry with stolen client money.
“Given the fact that you have her flaunting wealth on television where that money clearly should have gone to people who were injured in things like plane accidents and harmed in other ways is what really strikes a nerve,” said attorney Jim DeSimone of V. James DeSimone Law in Marina Del Rey, Calif.
Jayne’s jewelry is the latest catch of an unprecedented bankruptcy that has also snared a $3 million Monterrey beach house that is co-owned by FBI Assistant Director Donald Alway.
The Los Angeles Times reported that Mr. Alway’s now-elderly mother was once Mr. Girardi’s girlfriend and legal secretary.
Divorce proceedings show Girardi paid some $131,000 toward the oceanfront home’s mortgage over five years.
Prior to being appointed head of the Los Angeles Field Office by national FBI Director Christopher Wray, Alway served as assistant director of the FBI’s Weapons of Mass Destruction Directorate in Washington, D.C.
“The bankruptcy shows the length to which Tom Girardi apparently went in order to curry favor with those in power,” Mr. DeSimone told PacerMonitor News.
Mr. Alway did not respond to requests for comment, but the FBI’s national office said that since moving from FBI headquarters to his new role in Los Angeles in August, Mr. Alway has requested recusal and won’t be involved in the Girardi matter.
“It largely predates his time in the Los Angeles Division,” the FBI told PacerMonitor News in a written statement. “This case is being led by the U.S. Attorney’s Office in the Central District of California and FBI Special Agent in Charge Brian Gilhooly. The acting assistant director in charge (ADIC) is Amir Ehsaei for purposes of this investigation.”
In the 1960s, Mr. Girardi was heralded for securing the highest medical malpractice judgment statewide just after graduating from law school. Now, he’s accused of law violations, ethics rules violations and acts of moral turpitude for allegedly robbing clients of millions of dollars in large settlement cases.
Although Girardi & Keese Chief Financial Officer Chris Kamon was arrested and charged with fraud, a court-appointed guardianship could prevent the ailing Mr. Girardi from facing criminal charges for his alleged illegal actions.
“The guardianship was placed because there was a determination of a competency issue and as I understand it, Tom Girardi has been diagnosed with dementia,” said Mike Arias, past president of the Consumer Attorneys of California (CAOC) and Consumer Attorneys Association of Los Angeles (CAALA). “But the things he did happened when he was competent.”
Underlying his involuntary bankruptcy is a 2018 Lion Air crash that killed all 189 on board after the Boeing aircraft descended into Indonesia’s Java Sea minutes after departing.
Mr. Girardi allegedly did not fully distribute settlement funds received from Boeing to Lion Air plaintiffs, which is why the bankruptcy trustee has been so relentless in discovering Mr. Girardi assets.
“The trustee’s obligation is to find every asset or source of asset that they can claw back and bring to the bankruptcy of the estate,” Mr. Arias told PacerMonitor. “They look at all the records to see every payment made, and if there’s fraud, they can go back even further than the statutory period. Anybody who is a creditor should be happy this is happening.”
While the California Supreme Court ordered Girardi to pay $2.2 million plus 10% interest to four minor children of Lion Air flight 610 crash victims, the State Bar of California turned a blind eye to Girardi’s misconduct instead of investigating it, according to a report commissioned by the state bar.
The study found that one complaint resolved in 2002 showed evidence of a misappropriation but no disciplinary charges were brought.
“Girardi’s fame and fortune may have impacted the decision to erroneously close this case,” Attorney Alyse M. Lazar wrote in the report, which was released to the public on March 10.
There were 130 complaints filed against Mr. Girardi with the state bar between 1982 and January 2021 that were largely overlooked.
“That’s changing because the people Tom Girardi connived with are gone,” Mr. Arias added. “I do believe the state bar of California will not allow this to happen again.”