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California Bar Inquiries Failed, Girardi-prompted Audit Finds

June 11, 2021, 12:51 AM

Decades of missteps at the State Bar of California enabled attorney Thomas Giardi, the famed lawyer who is accused of misappropriating millions of dollars in client funds, according to a bar audit that recommended steps to tighten oversight of client trust accounts.

The confidential audit of past complaints filed against Girardi exposed “significant issues” over 40 years in the bar’s Office of Chief Trial Counsel in investigations and evaluations of “high-dollar, high-volume trust accounts,” the agency said Thursday.

The announcement followed a series of closed-door meetings by the bar’s Board of Trustees. While the full audit’s results weren’t revealed and no details about Giardi accounts were disclosed, the bar issued sweeping conclusions and proposed changes.

“The Board, its leadership, executive management, and the Office of Chief Trial Counsel are committed to implementing important and significant reforms to improve the State Bar’s oversight of attorney-client trust accounts and the discipline system as a whole,” board Chairman Sean SeLegue said in a statement.

The bar, the regulatory agency over more than 250,000 California lawyers, is considering hiring accounting experts to examine large client trust accounts to detect any improprieties.

The audit also signaled the need for automated tools to assist the chief trial counsel in identifying patterns of behavior that could signal possible misconduct, the bar said.

Bar staff will study new methods of attorney-client trust account monitoring and regulating to prevent misappropriations from occurring in the first place. The enhanced measures could include requiring regular independent audits of attorney-client trust accounts and/or required use of monitored escrow accounts. The results will be presented to the board at some unidentified date.

Girardi, who was admitted to the bar in 1965, had disciplinary charges filed against him last March in the State Bar Court after allegations of misappropriating client funds.

Girardi lacks the capacity to manage his financial affairs, is “subject to undue influence,” and is unable to make his own health-care decisions, the California Superior Court found Wednesday, citing “clear and convincing evidence” that a conservatorship is warranted. He suffers from “Major Neurocognitive Disorder,” according to a minute order granting his brother’s petition for general conservatorship.

Girardi’s court-appointed counsel, R.M. Anthony Cosio, was not immediately available for comment. Nicholas Van Brunt, of Sheppard, Mullin, Richter & Hampton LLP, declined comment. He represents Giardi’s brother, Robert, who filed the petition for a temporary conservator.

The bar declined comment outside of the news release.

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