Former clients of attorney Tom Girardi detail how he hid settlement money from them

LOS ANGELES (CN) — Joseph Ruigiomez was sitting on the couch with his girlfriend, watching the first game of the 2010 NFL season, when his world exploded. An underground gas line had ruptured, leaving behind a 26-foot crater, destroying 38 homes and killing eight people, including Ruigomez's 20-year-old girlfriend. Ruigomez survived, but suffered burns on 90 percent of his body and spent two months in a coma.

On Wednesday, the second day of now disbarred attorney Tom Girardi's embezzlement trial in a downtown Los Angeles federal courthouse, Ruigomez's mother Kathleen Ruigomez told the jury that Girardi had told them to sign their settlement agreement with the owner of the faulty line, Pacific Gas & Electric — without being allowed to read it first.

Federal prosecutors accuse Girardi, one of the most successful and powerful attorneys in California, of stealing more than $15 million from clients in four separate cases, including the Ruigomez family.

Unbeknownst to them, PG&E had agreed to pay the Ruigomez family $53 million. According to testimony by Joseph and Kathleen Ruigomez, Girardi told them that their settlement amounted to $5 million, plus a large annuity of $78 million to be paid out in monthly installments of $40,000, as well as periodic larger payments, for the next 60 years.

The confusing arrangement — presented to the family not as a choice but as the only possibility — was made all the more confusing when Girardi told Ruigomez that he wouldn't receive the $5 million right away.

That money, Girardi said, would be placed in his firm's account, from which he would occasionally dole out interest. The attorney gave different explanations for this over time: first the law firm had to pay off various medical liens, debts Ruigomez had incurred while recovering. Then Girardi began to blame the retired judge who supervised the mediation process. The judge, Girardi said, had to sign off on everything — an apparent lie.

"'He doesn't like to give a young man a lot of money," Ruigomez recalled Girardi telling him of the judge, adding, "Tom constantly brought him up every time I would ask for my money."

Under cross-examination, Ruigomez admitted that he had developed a dependency on narcotic painkillers for about a year following the accident.

Asked why he didn't pursue his money more aggressively, Ruigomez replied flatly: "Trusted him too much."

"He would call us his favorite clients," Kathleen Ruigomez said. "But we never got any details."

They would sometimes receive checks from Girardi's firm, but they were sporadic, and for different amounts: $54,000 here, $27,000 there, and then a seemingly arbitrary $100,000.

It was after he received this check, Joseph said, "I knew something very sketchy was going on."

The Ruigomez family cut ties with Girardi and hired another law firm to sue Girardi. They would later be forced to sue that firm, as well, for deducting 25% from a settlement they reached with Girardi.

It was unclear to the gallery how much the Ruigomez family had been paid, how much they were owed and how much money Girardi was being accused of stealing.

The difficult math might have served to underline Girardi's defense — that Girardi's firm was overwhelmed by "chaos," thanks to all the money coming in and out, as well as the fact that his mental acuity was begging to weaken.

Prosecutors countered that Ruigomez's story depicted a Girardi who played fast and loose with his clients' money, which was meant to be held client trust accounts.

Later in the day, another former client of Girardi's, Judy Selberg, detailed how she hired Girardi's firm to sue the owner of the boat involved in an accident on Lake Havasu that killed her husband in 2018.

After less than a year, the case settled for $500,000, to be paid out by an insurance company. Selberg was told that Girardi's firm would be taking 40% to cover costs and fees, leaving her with $300,000 — money that, as months went on, wasn't forthcoming.

Selberg repeatedly contacted Girardi's staff to ask about her money. The secretaries who answered her phone calls and emails all only said the checks had to be signed off by Girardi, and Girardi wasn't signing off, for reasons that were never made clear.

"Essentially, what people were saying was they didn't know where the money was either," Selberg said.

Selberg eventually received $50,000, followed later by a payment for $100,000. She was still owed around $184,000 when she hired a lawyer to go after Girardi — "the lawyer for the lawyer," she called him, with a wry smile.

Shortly before she sued, Girardi emailed her, writing, "I feel badly there was some miscommunications," adding that he would be happy to send her the remaining $184,000. Selberg testified she never received any more money from Girardi's firm.

Girardi's attorneys have signaled, in their opening remarks, that their defense would hinge on two prongs: Girardi's cognitive decline, and blaming his firm's former Chief Financial Officer, Christopher Kamon, a co-defendant who will be tried separately next year.

Girardi himself has sat stoically throughout the trail — at least during proceedings. A Daily Journal reporter, Devon Belcher, overheard Girardi arguing with his lawyers during a break on Wednesday morning, in a nearly empty courtroom.

"I know more about this stuff than you do. I was there," Girardi told his attorney Samuel Cross, according to the LA-based legal newspaper. "Don't treat me like that."

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