Girardi Criminal Indictments Halt Edelson’s Civil Fraud Lawsuit

The indictments of disbarred attorney Thomas Girardi and others associated with the bankrupt Girardi Keese law firm prompted a federal judge Monday to indefinitely stay a civil fraud suit against them and the firm.

Judge Matthew F. Kennelly, US District Court for the Northern District of Illinois, during a brief telephone hearing said he was administratively terminating the case, putting it “into a state of suspended animation” until the parties advise the court otherwise.

Girardi, former firm partner David Lira, and CFO Christopher Kamon were indicted on fraud charges for allegedly stealing funds from clients, prosecutors in Chicago on Feb. 1. A separate indictment omitting Lira was announced by Los Angeles prosecutors the same day. Kamon was separately indicted on allegations he was embezzling money from the L.A-based firm.

All of the men have pleaded not guilty to the array of charges against them. Lira and Girardi were released on bond. Kamon has been held as a flight risk since December.

Kennelly said the criminal case “is a reasonably complicated white-collar case. I don’t think it’s likely to get resolved anytime soon, but you never know.”

The three men face 12 fraud counts for allegedly stealing from clients, as well as criminal contempt charges in the US District Court for the Northern District of Illinois. Girardi and Kamon are charged in the US District Court for the Southern District of California with five wire fraud counts for allegedly cheating clients out of more than $15 million over a decade.

The Edelson firm was local counsel for Girardi in the litigation over the 2018 crash of Lion Air flight JT610, a Boeing Co. 737 Max 8 airliner that went down in waters off Indonesia, killing all 189 passengers and crew on board. The Chicago firm two years ago filed suit in that same Illinois federal court to recover its share of attorneys’ fees in the Lion Air litigation.

Edelson alleges Girardi, Girardi Keese, Lira, and former attorney Keith Griffin stole millions from victims and co-counsel.

The Chicago federal judge in January granted Lira’s stand-alone motion to seal and stay the case for 30 days pending a federal investigation. The stay issued Monday covers the case against all three defendants as well as the firm.

Kennelly asked the parties to file a status report Aug. 31 to “let me know where things are.”

Robie & Matthai and Swanson, Martin & Bell LLP represent Lira. Rosen Saba LLP and Cassiday Schade LLP represent Lira. Edelson PC represents itself.

The case is Edelson PC v. Girardi, N.D. Ill., No. 1:20-cv-07115, status conference 2/13/23.