An influential Los Angeles lawyer and Democratic donor has been convicted of orchestrating a Ponzi scheme that swindled investors out of millions of dollars.
At a Glance
- Tom Girardi found guilty of defrauding investors in a vast Ponzi scheme.
- Defrauded clients out of over $18 million in Los Angeles and Chicago.
- Faces decades-long prison sentence amid health concerns.
- Prosecutors highlight ongoing investigation and potential further indictments.
Conviction Details
Tom Girardi, a prominent Los Angeles trial attorney, has been indicted on fraud charges in two states for allegedly swindling over $18 million from clients. Indictments in Los Angeles and Chicago detail a fraud operation involving misappropriated settlements, including $3 million from victims of a Boeing plane crash. Each count of wire fraud Girardi faces carries a maximum sentence of 20 years in prison. Girardi’s high-profile political donations and once-revered status add a notable layer to this extensive scandal.
https://www.latimes.com/california/story/2023-02-01/tom-girardi-indictment-la-lawyer
Girardi, 83, is now in a memory care facility under a court-ordered conservatorship due to his Alzheimer’s diagnosis, a condition that raises complex questions about his prosecution. Despite his health issues, a federal judge in Los Angeles found him competent to stand trial. This ruling is considered a victory for prosecutors and Girardi’s former clients.
Involvement of Family and Associates
In Chicago, Girardi, his son-in-law David Lira, and former CFO Christopher Kamon were charged with eight counts of wire fraud and four counts of contempt of court. The trio is accused of misappropriating over $3 million from settlement funds meant for the families of Lion Air crash victims. Legal actions continue to recover fraudulently transferred funds, even as the investigation actively encourages other victims to come forward.
Impact on Political Donations
Girardi’s extensive donations to Democratic campaigns highlight concerns about the influence of such funds and the potential for economic exploitation. Authorities have acknowledged regulatory shortcomings, pledging to enhance oversight. Highlighting the broader implications, Danny Barnes, a former client, underscores the necessity of legal accountability by stating simply, “He’s not above the law.”
“He’s not above the law,” said former client Danny Barnes, who estimates he lost about $2 million from a settlement in the 1990s for Lockheed workers who said they were poisoned by chemicals used at the aerospace facility.
Prosecutors argue Girardi’s symptoms might be exaggerated to evade responsibility, hinting at further complexities within the legal procedure. Potential additional indictments are anticipated as the scope of the investigation broadens.
https://twitter.com/thejusticedept?lang=en
Broader Context of Fraud
This case fits a wider pattern of deceptive financial operations targeting unwary investors. William J. Wise’s guilty plea in a similar Ponzi scheme shows that these crimes are rampant and underline the importance of vigilant legal repercussions. The U.S. Attorney for the Northern District of California emphasized, “The United States Attorneys around the country have identified an unprecedented rise in investment fraud schemes, involving thousands of victims and staggering losses.”
“The United States Attorneys around the country have identified an unprecedented rise in investment fraud schemes, involving thousands of victims and staggering losses,” said U.S. Attorney Melinda Haag. – https://www.justice.gov/archive/usao/can/news/2012/2012_09_13_wise.guiltyplea.press.html
As images of fraudulent investments continue to surface, the need for stringent regulatory reforms grows clearer. Both financial and political sectors must adopt proactive measures to safeguard against such forms of exploitation.
Founders and Executives of Digital-Asset Company Charged in Multi-Million Dollar International Fraud Scheme
Announced with @NewYorkFBI @HSINewYork @IRSCI_NY https://t.co/mIFyoF2wFL
— US Attorney EDNY (@EDNYnews) November 1, 2023
Sources:
1. Tom Girardi, disgraced L.A. lawyer and ‘Real Housewives’ spouse, indicted on fraud charges
2. ‘A Ponzi scheme’?: Jury left to decide fate of once-prominent LA attorney Tom Girardi in fraud trial
