(CN) — A Chicago law firm accused singer and "Real Housewives of Beverly Hills" star Erika Jayne of acting as a "frontwoman" for her husband, disgraced lawyer Tom Girardi, in a court filing on Tuesday.
The court filing, essentially the first draft of a lawsuit that hasn't yet been filed, calls Girardi's now-shuttered law firm Girardi & Keese "the largest criminal racketeering enterprise in the history of plaintiffs’ law."
The filing by Chicago-based Edelson PC goes on to say, "All told, it stole more than $100 million dollars from the firm’s clients, co-counsel, vendors, and many others unfortunate enough to do business with the firm."
Edelson PC was co-counsel with Girardi & Keese in a lawsuit against Boeing, filed by the families of victims in the 2018 Lion Air crash that killed all 189 passengers and crew on board. When attorney Jay Edelson notified the judge in that case that his clients, who live in Indonesia, had never received their settlement money, it pulled on a strand that would eventually unwind the 50-year career of Girardi, a titan of the California plaintiffs bar, leading to his and his firm's bankruptcy.
"This is really the worst thing we’ve seen happen in plaintiff's law, our co-counsel stealing money from widows and orphans," said Jay Edelson, the firm' CEO.
Now, with Tuesday's court filing, Edelson seeks permission from the federal judge in Illinois overseeing the Lion Air lawsuit to pay his own clients back, with insurance money and with money from his own firm's bank account. In exchange, Edelson's clients will sign over to Edelson the right to go after the money stolen from them.
"We decided to step up and reimburse them for the money that Tom and his firm stole, and then we would get the assignment of claims so that we can go after the bad guys," said Edelson. "We understand the victims don’t have the resources to fight for years to collect the money. We also recognize they don't have a lot of faith in the U.S. judicial system, because of what's happened in this case."
Edelson has already sued two of Girardi's former partners, David Lira and Keith Griffin. Edelson is also a creditor in the still-pending Girardi & Keese bankruptcy. And if the Illinois judge allows it, Edeleson will file a new federal lawsuit in San Francisco against Lira and Griffin, as well as Erika Jayne and a host of other Girardi associates, including Girardi & Keese CFO Chris Kaman. That suit was attached to the motion as an exhibit, and could be rewritten before it's filed.
"When the curtain was finally pulled back, it became clear that Girardi Keese operated in a manner similar to a Ponzi scheme, but much worse," the yet-to-be filed complaint reads. "Erika acted as the 'frontwoman' of the operation, selling to the world (including unsuspecting clients) that Girardi Keese was successful. And she was exceptionally good in the role."
Girardi was first accused of withholding settlement money from his clients in the 1990s. Yet he was able to operate for another 25 years, thanks to the California State Bar, which he had effectively seduced, as well as his image as an exceedingly successful attorney. That's why he was able to borrow money time and time again, Edelson argues — because everyone believed he was far too rich and successful to be thief.
"The only way the scheme was going to be able to continue on is if everyone bought into the notion that Tom and his firm were enormously wealthy," Edeleson said. "That’s the key to any Ponzi scheme."
Jayne's fame eclipsed that of her husband when she was cast on the reality series "Real Housewives of Beverly Hills." On that show, as well as during her career as a minor pop star, Jayne took on the role of a sort of parody of a trophy wife, singing over-the-top lines like, "Money makes me hard and tight, I love to bathe in cash and pearls." She was equally boastful on television, deadpanning such sound bites as: “I’m an enigma wrapped in a riddle . . . and cash” and “Being broke sucks, and being rich is a lot better.”
Jayne's attorney did not respond to a phone call requesting comment. Jayne, who is in the process of divorcing Girardi, has maintained that she knew nothing of her husband's fraud.
Edelson's filing says otherwise.
"Erika knew of the scheme, intended to participate in it and — critically — to share in its profits," the filing says. "Despite her public claims that she and Tom were spending their own money, financial records show that more than $25 million of her own expenses were paid by Girardi Keese."
The court filing also levels serious charges at Lira and Griffin, accusing them of "wire fraud, money laundering, engaging in monetary transactions in property derived from specified unlawful activity, and interstate transportation of stolen goods." As an example, the court filing claims Lira "personally signed checks" for $550,000 from the Girardi & Keese client trust account — an escrow account that is not supposed to be touched by the lawyer, except when paying a client — to the firm's regular bank account.
Lira and Griffin did not respond to phone calls and emails requesting comment.
Follow @hillelaron
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