A new investigative report is revealing new details on how the estranged husband of Erika Jayne, Thomas Girardi, was apparently able to get away with allegedly misappropriating funds from his clients for so long. In fact, there are allegations of Thomas stealing money meant for his clients that dates back decades, well before the ‘Erin Brockovich‘ movie made him a known legal giant.
The allegations of the Real Housewives of Beverly Hills attorney embezzling money from his clients was reportedly an open secret in the legal community in California but unfortunately for his former clients, most of the cases filed against Thomas were unsuccessful. Quite frankly, people just didn’t want to believe that the famous and politically connected attorney, who has been known to even host fundraisers for popular politicians, would be capable of doing such a thing.
A new and lengthy report by Law360, in which they pored over thousands of court documents and spoke to dozens of people including former clients and lawyers, shows that since 1995, Thomas has in fact faced dozens of lawsuits over allegations of malpractice, fraud, or breach of contract.
Thomas was however always quick to convince others that any claims of fraud were simply being made by his enemies who envied his success.
The report also points out that Erika’s divorce filing, which she confirmed on November 3, came just weeks after Thomas admitted in a September 2020 deposition that he was broke.
“I’m — at one point, I had about $80 million or $50 million in cash,” Thomas said in his deposition which came about due to a lawsuit by his former client. “That’s all gone. I also had a stock portfolio of about $50 million, and that’s all gone.”
While the divorce between Erika, 49, and Thomas, 81, has been called a sham by those suing Thomas, it should be noted that Erika has since suggested that infidelity on Thomas’ part is the reason she pulled the plug on their marriage, even going as far as to name a judge as a former alleged mistress of Thomas’s.
Meanwhile, it is believed that the public might never know the true amount that is missing from Thomas’ clients as he regularly settled the cases against him privately and kept the details of his deals as secret as he could — sometimes even keeping the settlement details a secret from his own clients.
As Thomas currently faces an involuntary bankruptcy, Elissa Miller, an interim trustee for the Girardi Keese law firm, acknowledges that it could take years to get to the bottom of all of this alleged fraud citing the fact that Thomas preferred to use an ‘all-paper accounting’ system.
Alfred Warsavsky, a forensic accountant who dug into Girardi Keese’s finances during Thomas’ divorce back in 2002 also shed some light on the questionable accounting practices of the firm, citing Thomas writing himself a $9 million check from a Girardi Keese trust account back in 1996 — something that was not reported in the law firm’s accounting books.
The firm’s client trust accounting records “have been inadequate at best and abysmal at worst,” wrote Alfred back then.
Graham LippSmith, an attorney who worked at Girardi Keese for 13 years before leaving the firm in 2015, spoke of his experience working for Thomas after being repeatedly assured all the many lawsuits being filed against Thomas and the firm were simply the norm.
“You come out of a place like that thinking it’s normal to be sued” all the time, he stated. “It’s not.”
Thomas also had some luck in the legal system as quite a number of lawsuits filed against him by his former clients were dismissed due to technicalities.
An example of this came in 2016 when Paul Kranich, a former client who was part of the $785 million settlement Thomas helped score for Lockheed workers who were exposed to chemicals on the job, alleged that Thomas stole $8.5 million from the 1998 settlement. Unfortunately for Paul, his 2016 lawsuit was dismissed by the courts on the basis that it was filed too late.
And when Thomas wasn’t busy scoring victories in courts against his former clients based on technicalities, he was also successful in being able to keep the details of the cases filed against him private by attempting to settle them in arbitration rather than in court where the details, sometimes embarrassing, could be made public.
Even more, the Law360 report states that when Thomas couldn’t get cases against him thrown out of court, he would use stall tactics to delay the discovery process – a method that apparently led to his law firm raking up sanctions as they would sometimes miss the deadlines for the discovery.
While Thomas is facing an extremely likely disbarment these days, in addition to possible criminal charges after a judge referred a recent embezzlement case to prosecutors, it still remains a puzzle how he spent the last decades avoiding being disbarred despite the reported common knowledge of his alleged misdeeds and the fact that the State Bar of California actually appointed a special prosecutor in 2010 to investigate a ruling from that year that alleged Thomas repeatedly lied to courts while trying to enforce a $500 million foreign judgment.
Perhaps Thomas’ ability to use his legal muscles to shut up others can explain how he avoided prosecution for so long as when an outside lawyer questioned if all of the residents of Hinkley (the case the ‘Erin Brockovich‘ movie was about) had rightfully received the money that was due to them. This was regarding the case against PG&E, which resulted in a $333 million settlement reached in 1996, after the residents of Hinkley were developing diseases such as cancers and tumors that they suspected were caused by chemicals being released into their local water supply by a close-by PG&E plant. Thomas and other attorneys on the case reportedly sued this attorney twice in a state court for defamation only to eventually drop the claims.
There are also allegations that Thomas engaged in somewhat of a Ponzi scheme, allegedly misappropriating money from new clients to pay back the money he allegedly embezzled from his old clients.
Such was the situation that came after a federal lawsuit was filed against Thomas by his former clients who he represented in the litigation over hormone-replacement therapy (the case involved 30 elderly women who developed cancer after taking hormone-replacement drug Prempro). Court documents suggest that in 2013, Thomas paid the plaintiffs in that case at least $4.3 million by dipping into the settlement funds from other cases.
“And that suggests, in effect, a Ponzi scheme, where he’s using money from basically subsequent cases to fund his and his firm’s obligations on prior cases,” shared Neil Wertlieb, a seasoned attorney who has also chaired the ethics committee of the California State Bar.
For the time being, the once-powerful attorney, who at one point had a net worth of $264 million, is reportedly living alone and unable to care for himself according to his family who are now currently trying to get a conservatorship over him.
Today, as Thomas remains admittedly broke and facing an involuntary bankruptcy, his brother, Robert Girardi, recently claimed that the powerhouse attorney “is incompetent and unable to act for himself” after he failed to meet a deadline in the ongoing bankruptcy proceedings against him.
But as with many things related to Thomas these days, things are not always what they seem. In fact, it is believed by those suing Thomas that this is yet another attempt at fraud as Jay Edelson, the founder of Edelson PC (a firm suing Thomas), calls Thomas’ alleged mental deterioration a sham — stating the attorney had zero issues when he was still communicating with Jay and his staff as recently as December 2020, and that Thomas was “well aware of what he was doing.”
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