Girardi’s Criminal Risk in Balance at Resumed Competency Hearing

Indicted, disbarred, and disgraced plaintiffs’ attorney Thomas Girardi will return to federal court in Los Angeles on Tuesday for day two of a hearing to determine his competency to stand trial on wire fraud charges.

The results of the hearing could determine whether he’s fit to be tried in two criminal cases, or none.

The onetime principal of the now-bankrupt Girardi Keese plaintiffs law firm was indicted on consecutive days earlier this year by federal court grand juries in L.A. and Chicago, charged in both venues with stealing client funds.

He and his co-defendants have pleaded not guilty.

Girardi allegedly has dementia and has had a conservator appointed to act on his behalf. Day one of the hearing was held on Aug. 23 before Judge Josephine L. Staton in the Central District of California but was continued to enable the parties to give further evidence.

If Girardi is deemed incompetent, and there’s no hope of restoring his competency, prosecutors would have no choice but to dismiss the charges against him, according to attorney Bill Barzee, principal of the Miami law firm Barzee Flores.

“It comes down to the fundamental right to a trial, of being able to face your accusers and assist in your defense. If you’re not able to do that and have little or no idea what’s going on, well then, what’s the point of a prosecution,” he said.

Letters from Friends

Girardi’s lawyers filed a handful of redacted exhibits after the first hearing date, including letters from his friends and former Girardi Keese employees recounting observations about his decline. They also included memoranda summarizing interviews with the program coordinator at the skilled nursing facility where the disbarred lawyer now resides.

Rick Kraemer, who describes himself as a “very close friend,” said in a letter to a physician evaluating Girardi in 2021 that the attorney’s “cognitive acuity began to deteriorate noticeably,” after a 2017 car wreck, and that the decline had recently accelerated.

Kraemer and others also said Girardi still seemed to believe that his firm, which was permanently shuttered by January 2021, was open and operating.

Prosecutors in Los Angeles allege that Girardi and his now-defunct law firm’s former CFO, Christopher Kamon, embezzled more than $15 million from firm clients.

Girardi and Kamon—along with David Lira, Girardi’s son-in-law and former law partner—also face criminal charges in the US District Court for the Northern District of Illinois. That indictment alleges that they stole more than $3 million in client settlement funds.

The money, paid by Boeing Co., was meant for family members of those killed when Lion Air flight 610—a Boeing-built 737 Max airplane—crashed into the Java Sea 2018. The Chicago case has remained relatively quiet while the court waits for the competency contest to play out on the west coast.

Judge Thomas M. Durkin, who presided over the Lion Air matters, referred Girardi’s misconduct to federal prosecutors after holding him in civil contempt in December 2020 for his failure to distribute the settlement funds.

Shortly thereafter, Girardi’s brother petitioned for general conservatorship in a California state court, claiming that Girardi lacked the capacity to manage his affairs.

Timing Suspicious

Prosecutors say the timing of Girardi’s decline is suspiciously convenient and that the ex-husband of “Real Housewives of Beverly Hills” star Erika Jayne is malingering to avoid his trial.

Defense attorneys say Girardi is good at hiding his cognitive decline. His defense team has presented neurologists, neuropsychologists, and a neuropsychiatrist who say he has dementia, while the prosecution’s neuropsychologist says he is competent to stand trial.

On day one of the hearing, a government expert testified that Girardi scored inconsistently on cognitive testing and was inconsistent during evaluations but when asked about a hypothetical case matching his, his musings about it were “spot on.”

Girardi’s public defender in the same hearing questioned whether the neuropsychologist was biased.

Consequences

“The two positions are diametrically opposed and there is no way to ‘split the baby down the middle,’” said Agustin Orozco, a Crowell & Moring LLP partner and former prosecutor in the Los Angeles-based US Attorney’s Office for the Central District of California.

Girardi appeared at his first competency hearing in slippers. His use of a federal public defender “may play into the optics” of an infirm, broke, and physically broken man, said Michael S. Weinstein, chairman of Cole Shotz PC’s nationwide white-collar criminal defense and government investigations practice.

“There’s value in looking old and frail and mentally incompetent,” Weinstein said.

When a defendant is found incompetent to stand trial, they can be committed to care in appropriate facility for up to four months. That timeline is usually extended, said Hanni Fakhoury, a former assistant federal public defender and partner at Moeel Lah Fakhoury LLP said.

If treating doctors don’t believe the person’s competency can be restored, however, they have to decide whether the person is a danger to himself or others.

“If so, they can be civilly committed and remain in custody,” Fakhoury said.

The federal Public Defender’s office represents Girardi. The US Attorney’s Office for the Central District of California represents the government.

The case is USA v. Girardi, C.D. Cal., No. 2:23-cr-00047, hearing 9/12/23.