An attorney whose work defending the environment 30-years ago was the subject of the Hollywood movie Erin Brockovich, has been cast as the latest villain in the never-ending-drama of the Boeing 737 Max.
Tom Girardi, of Girardi Keese in Los Angeles, has been fined, the assets of his firm frozen and he appears to be the subject of a federal criminal investigation. The once-respected attorney is accused of stealing the money Boeing sent to him to settle several suits in the October 2018 Lion Air crash.
In a lawsuit filed in Northern District of Illinois Federal Court, Chicago attorney Jay Edelson compares Girardi to the notorious embezzler Bernie Madoff and accuses Girardi of presiding over a Ponzi scheme that included his wife, television personality Erika Jayne Girardi and a company she controls, son-in-law David Lira, law partner Keith Griffin and several attorney finance companies.
“The Girardi firm has been running a Ponzi scheme for at least a decade,” Edelson was quoted as telling the court in the publication Law360. “When money comes in, they use that to pay previous creditors, previous clients, and then they wait until more money comes in. And what happened is, I guess everything just caught up with them. But this is not new behavior. This is consistent. They’ve been doing it for a decade.”
Because of Erika Jayne Girardi’s role on the television show, Real Housewives of Beverly Hills, “Tom and Erika must project a public image of obscene wealth at all times,” Edelson wrote in the complaint. Client money, including $2-million owed to children orphaned in the crash of Lion Air 610, was diverted to personal and firm accounts and to pay debtors, Edelson claims.
Edelson worked with Girardi as local counsel in Chicago in cases filed against Boeing by families of Lion Air victims. After months of unsuccessfully trying to confirm that the awards he negotiated on behalf of four children were distributed to them by Girardi, Edelson filed a lawsuit against Girardi and others earlier this month.
In addition, Edelson also asked that Thomas M. Durkin, the judge in the Lion Air cases, find Girardi in contempt for his failure to pay the children which was part of a court order.
On Monday, Durkin did just that, fining Girardi $2 million and freezing the assets of his firm.
“No matter what your personal financial situation is, no matter what kind of pressures you are under, if you touch client money, you are going to be disbarred and quite possibly charged criminally,” the judge said, then he recommended federal law enforcement begin an investigation, which appears to already be underway.
The world of aviation disaster litigation is not for the faint of heart. Lawyers have gone to extremes competing for cases that promise a big payout, hounding victims’ families, playing loose with the truth, and trashing the competition. That was especially true for the two 737 Max crashes because early on it appeared likely that Boeing would be held liable for the accidents which combined killed 346 people. A big company with deep pockets means big payouts.
“The Lion Air case was the wild fucking west,” one experienced aviation lawyer told me.
Now, with dozens of cases settled, quite a number of plaintiff’s lawyers are back before judges in Illinois and California and in private mediation arguing over the division of fees. Still, nothing about the all-elbows nature of today’s aviation bar prepared Edelson for what he encountered with Girardi.
“Tom and his firm had excellent reputations,” Edelson said. “I’ve been practicing for a quarter-century. I’ve seen a lot of bad activity. But what I haven’t seen is reputable law firms stealing money from clients.”
During the hearing on Monday, Evan Jenness, the attorney for 81-year old Girardi suggested that her client may not be mentally competent. While she declined to comment further, one has to wonder why any sane person would want to join the cast of bad actors associated with the 737 Max.