Latest / Both Things Are True Crime / Part 2 | Tom Girardi: where the client money went
Transcript
- part2: In two thousand seven a man walks into a jewelry in Los Angeles and buys his wife a pair of earrings. There are some princess cut diamond studs. Over six carrots each, more than twelve carrots together set in a fourteen carrot white gold. And it's worth about seven hundred and fifty thousand dollars. Now, this man who walked into the jeweler in Los Angeles who buys these expensive behind earrings, he is one of the most decorated plaintiffs lawyers in the state of California. He can afford it, okay? Nobody in that store has any reason to inquire a single question from him. And 15 years later, a federal bankruptcy trustee is going to put those exact earrings in an auction catalog because the court will find that the money that bought them was never his to spend. And that's the whole episode in one object. And it is why I'm starting here instead of starting with him. Because the fight over those earrings never required anybody to have an opinion about his wife. Not once. The question that proceeding was never whether she did anything wrong. The question was who money is this? And I want y'all to hold that and I'm going to walk you through 18 years and I'm going to bring it back to this box, okay? So let's talk about it. You need understand who this man was before 2010, right? Because the whole thing is unbearable otherwise. Tom Girardi ran Girardi Kessy out of downtown Los Angeles. He was a plaintiff lawyer, which means he did not work for corporations. He worked against them. The Aaron Brockovich case, that was his. The one they made a movie about where utility company poisoned the groundwater in a desert town and the law firm went and got those people paid. That was his firm. That was his win. So Think about who calls a man like that. Because people whose child died because the company cut a corner. Maybe someone who calls a man like this is someone who got hurt at work and cannot work anymore. Maybe somebody in a hospital failed. Maybe somebody has already lost the thing and now they're sitting across the desk from a lawyer because it is the only kind of justice left on the menu. That is who. Is in the chair across from him every day for decades. And they do not come to him with money. That's the entire point of a plaintiff's practice, okay? They come with nothing. And he fronts the fight, and when he wins, the settlement check comes to his firm. He takes his cut and he gives them the rest. Which means by design structurally, the money belonging to the most desperate people in Los Angeles County passed through Tom Girardi's hands before it passed theirs. And I want to say something and I want to be clear that it is my opinion and not a finding. I do not think you can do what he did unless something in you is already gone. I'm not talking about broken. I'm saying gone and there is a difference. Because a desperate man, they'll still want and cannot sleep, right? Someone worth their salt. But a man or a person, a human, I don't care. Who does this for 10 straight years has built an architecture. Okay? He has a system and a story that he tells himself, and he has decided somewhere along the way that the person in that chair is an input and not a person. And I think that it takes a particular cruelty to do it from inside the helper's chair. Y'all know what I'm saying? Because anybody can be a thief, but it takes something else. to be the one holding the door open for grieving people so you can go through their pockets on the way in. So a settlement check arrived at a law firm, right? Let's just say it's a million dollars, right? And the client is owed $600,000 of it. Well, where does it go? Well, everybody has to sort out that math. Well, it typically goes into a client trust account, and that account is, from what I can see, some of the most serious thing in the practice of the law, okay? Because it's not a courtesy and it's not an accounting preference. Every state bar in this country has rules about it, and they are close to. To absolute. That firm is not the firm's money. It is being held. The lawyer acts as a custodian of it, nothing else. You do not pay the office rent out of it. You don't be floating paycheck, payroll out of it for a week, and then putting it back. You don't borrow against it. It is not yours to touch. You do not let it touch the operating account. And that is where I have learned the word commingling from. Because that's when a client's money and firm money end up sitting in the same account together. That's literally it. That's the whole offense. And let me tell you what it doesn't require. It doesn't require for you to steal anything, it doesn't even require intent, it doesn't even require anybody to be harmed. You can co-mingle by accident on a Tuesday through sloppiness and still have to face discipline for it. The rule is that strict on purpose. And I think we know why, but let's talk a little bit about it, okay? Because once those two pools of money are in one place. Nobody can tell them apart anymore. Not you, not the bank, not an auditor, a trustee, not a judge, not fifteen years later, which means the second a lawyer lets client money mix with their own, every dollar that comes out of that account for the rest of the time is a dollar. Somebody can argue belong to a client. And that is important because that is actually gonna be the entire back half of this episode. But I think I you know so I think the rule here is the rule is not there to stop the theft, I think. Because there are other rules for theft. I think the rule is there so that the question can still be answered later. And Tom Girardi, he broke it. And that is why in 2024 a court was able to look at a pair of earrings bought in two thousand and seven and say who they really were. So october tenth, twenty ten, to late two ninety twenty, we're talking about ten years here. This window is from the Justice Department's own sentencing release, so it's not an estimate. It is the government saying Here is when it ran. And here is how it actually worked because the mechanisms, I think they're a little bit worse than the headline, I ain't gonna lie, because he did not take the money and disappear. Instead, from what I can see, he ran that firm kind of like a pond scheme, okay? What I'm saying basically is a settlement would come in, right? my gosh, I love when you do that to me. I'm gonna keep talking, because I don't even care. so a settlement comes in, right? And he takes it. Then when an older client he's already robbed, gets upset and starts making a little noise, then what he gonna do? He's gonna pay that person a little piece of the new money just to keep them quiet. So every client who finally got something was being paid with money that was stolen from the next. And that's not a man, to me at least, who made a mistake with just like one account. That's a system. And it has to be fed. And the only way to feed it is to keep taking new cases from new people who do not know. And then there's the part there's the part that I cannot get past. Actually there's a lot of parts I can't get past, but Because what really rolled me the wrong way is when clients were calling wanting to know where their money is. He was sitting there lying to them specifically, repeatedly with detail. The Justice Department says he sent clients false messages denying the settlements had even been paid. And when that stopped working, he invented obstacles. He told people their money was held up by tax obligations, bankruptcy claims, judicial authorizations that had to come first by other debts. He was basically making up legal problems and lingo lang lingal lingo. See? See? He was speaking like that. He's like lingo, lingo, lingo. Legal language to people who hired him specifically because they didn't understand legal language. And when you think about being on the other end of that call, right? You're hurt. You won. Somebody admitted they did this to you and they agreed to pay. And every few months, the most respected lawyer in Los Angeles tells you there's one more hoop. One more filing, one more judge who has to sign off. Honestly, to me, it almost feels like if you if you freaking had the dad from Shameless as your lawyer, okay? There's always gonna be an obstacle, okay? He's gonna always have something to do. He'll always have to trick up his pocket. That's what Tom Girardi was doing. and you believe him because why would you not? Why? Meanwhile, he's over here diverting tens of millions out of the firm's operating account, private jet travel, jewelry, luxury cars, exclusive golf and social clubs. The United States Attorney called him a thief and a liar, who conned his vulnerable clients. And the IRS agent on the case said he enriched himself on the backs of people who trusted him on some of the worst days of their lives. And that's the government's own language in the release. I did not write that. They did. They won't playing around. Now 2015. Okay. Don't look at me like that, Erica. The machine has been running for five years, right? And then we get Miss Erica Jane patting the poining the real housewives of Beverly Hills. And if you didn't watch, let me tell you what she was, what she is. Erica Gerati. was at least the lawyer's wife, Erica Jane, was the dance music performer with the foil glam team a wardrobe budget that got discussed on the camera like weather, music videos, a Las Vegas run, backup dancers, the whole apparatus. And the show was openly fascinated by how much it cost. That was not hidden. That was the storyline. People were going to her face and they were like, Girl, what is the glam Coston and she said, I got the numbers for you, honey. Now the company behind all of it was called EJ Global. Her husband set it up and it existed to run her entertainment career. And according to the Justice Department, more than $25 million came out of the law firm's operating account to pay EJ Global's expenses. $25 million out of the account where client money had been mixed in since 2010. So here is the sentence, and I'm gonna say it carefully because the careful version I think is more damned than the sloppy one. Now. The government did not say Erica stole anything. The government said the money that funded her career came out of an account that was not clean. the glam, the jet, the residency, the viewed videos, the show, the clients paid for it. Whether or not anybody on camera knew that is a completely separate question, and I'm gonna get to it, but the money is the money, and it came from where it came from. Alright, and I I just want y'all to hold two images at once because this is the one that actually turns my stomach a little bit. Because somewhere in Los Angeles County, there's a woman on hold with the law office being told her settlement is tied up in a judicial authorization. And on Tuesday night, she can go ahead and turn on Bravo to see what her money was doing. Patton a poo. Now, October twenty ninth, if you guys don't know Erica Jane, she has like this thing, she's like in the show, she's like, I'm patting a poo. I'm patting a pull. Y'all know what I'm saying. and it's like a dance move that she has. You can go look it up for yourself if you want to. October twenty ninth, twenty eighteen, off the coast of Indonesia, Lion Air Flight six ten. It goes into the Java Sea thirteen minutes after takeoff. And 189 people died. And there were no survivors. And families of some of those passengers, they end up as clients of Girardi Kessie. And I want to be precise here because I've found this detail to be mangled a lot of places. And I want to be very precise, right? so the case Tom Girardi was convicted in in Los Angeles is not the Lion Air case. The Lion Air allegations are a separate federal case filed in Chicago, which also charges his former chief financial officer and his son-in-law. Girardi himself was dismissed from the Chicago case because of the Los Angeles conviction. So don't let anyone tell you that a jury convicted him of stealing the from the plane crash families, okay? Because a jury convicted him of four counts of wire fraud against other clients. But for what I can see, the plane crash families are Or a different courthouse and a completely different document or docket. And but this is why I'm telling you it anyway, because it is the same firm in the same decade and the same account, and it is the clearest picture anybody has of what kind of client this operation was built on. Because people who lost a child in the ocean, they hired an American law firm because that was the only lever they had, and then they had to go to court a second time to find out where the money went. And that is what the trust account rule exists for. Not for lawyers, it's for them. So late 2020s, where it all comes apart, right? Y'all, we all remember, okay? And it came apart fast, okay? Government wasn't playing with your behind when they caught up with you, okay? So in November, Erica, she filed for divorce after 21 years of marriage. And then within weeks, creditors they forced Gerardi Kessie into bankruptcy. Voluntarily, involuntarily, which means the people he owed went to a court and said, We done waiting, open this man's books now. And now listen, I'm not going to tell you what she knew when, because I don't know. And neither does anybody else who is not her. But what I will tell you is the order of the dates, okay? And then you can just sit with that however you want. Because the divorce filing comes first and then the firm goes whoop under right behind it. That's not a finding, that is a calendar. And once a bankruptcy opens, something changes that most people watching, I don't think really understood at the time. Because a trustee gets appointed. And a trustee is not a lawyer for anybody in that family. A trustee works for the creditors, which in this case means the clients who ain't never got paid. So the person's entire job is to find everything that ever left the estate and go get it back. Not to punish anybody, not to prove anybody's guilty, but to recover property. And that is the moment a pair of earrings from two thousand and seven became a legal problem, heard across the world. The thing a trustee does is called a clawback. And it I think it's a pretty misunderstood idea in this entire story, but I'm gonna try to get through it carefully, okay? I'ma I'm gonna I'm gonna do the example with the car. All right. So somebody steals money and they buy a car with it, right? And they give you the car. You ain't do nothing. You ain't no to driving the car someone handed you. Now the trustee can come take that car. And it's not because you're guilty of anything. No one is saying you are. The trustee doesn't even care if you are at all. It is because it was never your car. And I I feel like for most of us that's not a complicated concept, right? For most of us, but for some people, you watch the body cams, it is a complicated conversation for some people in this world, okay? But it ain't your car. It was never your car. It was bought with money that just belonged to somebody else, and that somebody else's claim on it doesn't just evaporate because the money passed through a second pair of hands on the way to a dealership. So the the two questions, I think, and I think they're very interesting, I think we should all memorize this. Not most of us, but some of us in this world. But also you're probably end up seeing it maybe on like the next celebrity bankruptcy case that costs your phone. But the criminal courts want to know, did ya do it? The bankruptcy court, they want to know, whose was it? Two completely different questions, different burdens of proof, different outcomes available, different people even acting. And almost every single argument I've ever read about Erica Jane, and I've read a truly unreasonable number of them, don't judge me, on Res Dib, Lickstick Alley, fit Facebook groups, honestly, sometimes. But a lot of people, they they were I feel like they were fiercely answering the first question in a case that was really only about the second, right? Like whose money is it? And that's not me dunking on anybody because I feel like it's not really explained and that's why I have this show existing, okay? But it's also why a woman who has never been charged with a crime can get sued for twenty five million dollars and have that make perfect legal sense. So now we're back to where we started. Two thousand and seven. Princess cut that twelve carats. Seven hundred and fifty thousand dollars. I don't think I understand the value of a dollar, I'm not gonna lie to you, because I would never care to wear them. Baby, we s this is this is good this is going into cash, okay? Hey, nah, I'm I'm good. I don't even want to wear something that's that much money, not gonna to you. But the trustee, they basically have said that the money came out of a dirty account and that they belong to the estate. And in 2022, a court orders her to turn them over, and she does. And then I feel like the case gets strange in a way I was generally not expecting, if y'all remember. So in November 2022 The trustee side, they go public, right? And they say, y'all, the pair that Miss Erica Jane Gerdy handed us, that's not the pair on the 2007 invoice. They have the stone certified by the GIA, which is the gemological geomological. Geomological lab, the whole industry uses. And the 2022 certification, they describe Different diamonds. And she's never addressed the swap allegation from what I could find. I looked into it a lot. she's also never stopped asking for the earrings back, by the way. Now, I'm not gonna tell you what happened because I don't know. And neither does anybody else, but it's on the record, and I just think it's a very strange thing to just leave sitting. So I wanna talk about it. Now, moving on. December the seventh, 2022, John Moron Auctioneers, the winter fine jewelry and time piece sales. Listed. They list the earrings in the auction's own words. On behalf of the trustee through a court-ordered sale, estimate $250,000 to $300,000. And they go for $250,000. And when we sit with that number for a second, it's his own small tragedy, right? A pair of earrings that are retailed at three quarters of a million dollars brings a third of that at auction. And that gap is not a scam and no one's cheating anybody. That is simply what it costs to turn jewelry back into money for people who are owed money. Everything in this story works like that. It goes in full price and it comes out at a discount, and it's the clients who eat the difference. And weeks after the sale, the wife of the attorney running the trustee account, the as asset hunt, is the one who's photographed wearing them. Cause she bought them at the l auction, legally, publicly, and in an open cell that anybody could have been in. And I just have to note that I think that is the single most Beverly Hill sentence, okay, that I've ever said. But here's a part that I feel like a lot of people didn't cover all the way through because it actually does have three endings. And I can talk about it now because hindsight, but Other people they're running their headlines real time. So it makes sense why there's a little bit of a gap. But Erica appealed the turnover order and in July 2023 she won. The appellate court actually agreed that the earrings should not have been handed over. So then everybody ran a headline. But the problem is that the earrings had been sold for seven months earlier, so winning got her a remand, but not the pair of earrings. So then he goes to bankruptcy court and there's a hearing on September 24, 2024. And the court finds that Girardi bought those earrings in 2007 with co-mingled client trust funds, which made them property of the estate. So her side argues that the evidence was ancient and unreliable, and that if $65 million came into that firm, then the firm was owed $20 million of it. So some of that money was legitimately his. Court ain't have it to do, they weren't persuaded, however. And so her own attorney conceded on the record that co-mingling was a reasonable interference or inference. I say interference. So she doesn't get the earrings. And she doesn't get the $250,000 either. So she like lost and won and lost, and that happened two years apart. And I just think it's interesting because I feel like most recaps stopped reading after whichever one probably came out when they happened to be paying attention. But think about Decided it. It wasn't a confession or a text message or a reunion couch or a producer question or anything anyone ever said on television, but it was instead one bank account in 2007 and whether client money and firm money were sitting in it together. And that's it. That's literally the whole case. Everything I've talked about from like the third part that we're talking, it all arrived 17 years later to take those earrings off a woman's dresser. So August 2024 happens, right? And a federal jury in Los Angeles, they convict Tom Gerardi on four counts of wire fraud. That is Title 18, Section 1343. Wire fraud is a scheme to defraud carried out using wires, which in practice means bank transfers and emails. So every time money moved, that was a count that was available to them. And then in June 3rd, 2025, United States District Judge Josephine L. Staten Staten sentences them. 87 months, more than seven years, two million three hundred ten thousand two hundred forty-seven dollars in restitution and a thirty-five thousand dollar fine ordered to surrender by July 17th, and he was disbarred. And he didn't go down alone, which is the part that tells you how big this was. Christopher Cameron. The firm's chief financial officer pleaded guilty to two counts of wire fraud in October two thousand twenty four and got one hundred and twenty-one months, which is more than Girardi got, and he had he owes nearly nine million dollars in restitution. And David Leira, Garardi's own son-in-law, But I think he must have been a son like I don't think he I don't because Erica this must be a son in law from a different marriage. 'Cause Erica's son is a police officer, I believe, if he still is. but David Lyra Lira, Gerati's own son and Gerati's own son in law, I'm pretty sure not Erica 'cause she I'm pretty sure she only has one kid, but a lawyer at the firm, he's charged in the separate Chicago case. So that's basically a chief financial officer and a son in law. That's not one man at a desk with a checkbook, that's an institution and the people closest to him were inside it with him and one of them was family. Now Miss Erica. And I'm starting where the record starts, not where the comment section starts, okay? Because Erica Jane has never been criminally charged with anything. Not indicted, not named any information, nothing. And that's not me being careful acute. That's me telling you something about the evidence. Because the United States Attorney's Office, they spent years up inside them foreign bankers' account account and records, okay? They built a case strong enough that a jury convicted on four counts. They charged the chief financial officer, the son-in-law, they had subpoena power, the accounts, they had the wire transfers and every incentive on this. Art because charging the famous wife is literally the easiest press conference anybody can get in their life, okay? But they charged the CFO and they charged the son-in-law and they didn't charge her. And so I feel like if what the public can see were enough to charge her, then the people who could see considerably more than the public would have done it already. She was named in a civil suit claiming that she knew about the lion air money and she was dismissed from that suit in 2022. And the bankruptcy trustee came after her for $25 million as a clawback. And in May 2026, she settled it before it reached trial. And the settlement's not a finding. Nothing was proven and nothing was admitted. So I'm not spending this episode asking you guys if you knew. I'm not ever gonna do a poll or you decide, no dramatic pause or something. Because I think that question got answered by everybody who had the power to answer it, and the answer was no charges. But what I will talk about is what she did afterwards, because that's not an accusation, that is conduct. It is dated, it is in a docket, and it is a good deal of what happened on television while federal lawyers were in a courtroom trying to undo it. Because a federal court found that the jewelry was bought with money that had client funds mixed into it. And those clients were not the Lionair families. That crash was 11 years earlier. So do not let anybody merge those two for you. But it was somebody's settlement money. Sitting in an account where it had no Business being. And she wore it on television while a trustee was in a courtroom trying to get it back for whoever that was, and nobody made her do that. There's no court order requiring her to accessorize. That is the sentence. She's not a criminal, but she ain't a bystander either. And I feel like on this show I can say both of those in a row without flinching. Now I want to say one thing for my own life because it is a reason I do not find any of this confusing and it is a reason I will not sign either verdict of. So one I was married, right? And one day my husband looked at me and he said in his eyes that we were more like brother and sister. Is that sexy? I'm being sarcastic. But that's how he opened the conversation that basically ended our life together. And he reclassified me. He didn't say he was unhappy, he didn't ask to work on anything at that point. Later on he did. He's like, How much you give you have to believe in God like I do and all this type of stuff, whatever. I'm I'm simplifying it. Of course there's more to it, but I'm not getting to it now. But he to me He changed what I was to him privately, on his own time. That's the indication of saying you're more like brother and sister to me. It's reclassification in my eyes. and I was changed w to what I was to him privately on his own time over some period that I will never have access to. And then I was informed of the result, like a memo. And I say that to say this because what I took from that is that two people can live inside the same thing for years while one of them has quietly filed it under something else. Listen, the outside of the marriage and the inside of the marriage are like two different buildings. And sometimes you're only ever standing in one of them. So no, I do not find it hard to believe that a woman could be married to a man for 21 years and never be shown the books. And I also do not find it hard to believe that she was shown. More than she says. I think both of those are completely possible from the inside in a remarriage at the same time. Which is exactly why the law makes somebody prove one of them. The law don't care about no comment section or reunion. Don't care about me, not you, not a woman on a podcast with a strong opinion, some diamonds on the slide. Somebody with subpoena power had to prove it, and they did not. So now let's put the two half next to each other, okay? Because in New Jersey we have a couple who hid a television show from a federal court because the show was the asset they were lying about. And in California, a man had his clients pay for one. One coast concealed the camera, the other coast financed it with other people's settlement money. And it's the same lesson from both directions. And I think the lesson is that the network is not the top of anything. It never was. It was literally just a vendor. Because Andy Cohen cannot pardon anyone, he cannot continue your storyline past the reporting date, he cannot get you a filing extension, he cannot bond you out, keep a woman out of federal prison, keep a man off a plane to Italy, keep a pair of earrings off an auction block. He may have auctioned for him. But it turns out that the man who actually can pardon it Can't fix it either. Not by himself and not with one signature because a pardon reaches a conviction and it does not reach a removal order. And that is two federal systems that don't answer to each other. And the only things on this earth that can move both of them are time and paperwork, because the court is the highest of the land. So the show ain't got no choice but to hike that little skirt up and move your legs. And both things are true. That's the name of the show and It's true right now because Tom Jardy spent decades getting money for families that corporations destroyed and he stole from families that had already lost everything they had. Same skills, same instincts, same phone number on that billboard, but pointed two directions. A man who built his entire name on getting people paid and the people he did not pay were the ones who had already lost the most. So one last thing for our go. There are people in Los Angeles County right now who won their case and were told their money was being held up by some damn judicial authorization and they believed it and they're still waiting. I just think about them because they're the only people in this tire story who ain't never gonna get a show, a reunion, a confessional, or podcast. And while we may not know their names, I'ma hold And we know we p come on. We know it was Thursday when Gerati and the Judicists was doing some stuff they ain't had no business doing. It was a Thursday. It was one of these Thursdays. One of these. Anyway, everyone be safe. I never know how to end these things. but like, comment, subscribe, I guess. I mean not I guess. Like, comment and subscribe. Be more assertive. Like, comment, subscribe, please. Yeah. Anyway, this is both things are true crime with Jaquela and Yeah. I'm out of things to say. Bye.