Former Girardi client says attorney’s obfuscations were like ‘reopening wounds that we were trying to close’

LOS ANGELES (CN) — A former client of disgraced attorney Tom Girardi took the stand on Wednesday, the sixth day of the lawyer's criminal trial, and told the court about her year-long effort to recover settlement money owed to her by Girardi's firm.

After Erika Saldana's one-year-old child was badly injured in a car crash caused by a drunk driver in 2015, she hired an attorney to sue both the driver and the manufacturer of the car seat. That attorney would later refer her to a larger firm — Girardi & Keese, run by the famed plaintiff's attorney, Girardi, who is now charged with illegally using millions of dollars that should have gone to his clients.

In 2019, Girardi helped secure a $17.5 million settlement from the car seat maker for Saldana. She was told she would get the money within 60 days. But initially, she only received a small down payment.

What followed was a tale now familiar to those observing the Girardi trial, now in its second week: emails and phone calls to Girardi and his staff, politely returned; a litany of excuses followed by promises; dribs and drabs of partial payments, but not quite the full amount owed.

"They were just reopening wounds that we were trying to close," Saldana testified, crying.

Saldana showed up Wednesday ready to testify in person, wearing a mask, and told the court that she'd tested positive for Covid-19 two days ago. After some coughing and an admonishment from U.S. District Judge Josephine Staton, prosecutors hurried Saldana to another room of the federal courthouse in Downtown LA, where she was able to testify via Zoom. Even so, her testimony was probably the most emotionally impactful of the trial thus far.

By September 2020, Girardi's firm still owed Saldana about $1 million. Girardi's secretary called to say there was an envelope waiting for Saldana at the firm's front desk. When asked what she expected to find inside, Saldana testified, "I don't know. I assumed it was at least half."

When she opened the envelope, she found a check for $5,000.

"I felt really offended," Saldana said. "I didn't even cash it. I just ripped it up."

Saldana set up a meeting with Girardi, which Girardi then canceled, promising another check within two to three weeks. When that check never arrived, Girardi offered up his latest excuse: He'd just had cancer surgery.

"I was tired of everything," said a tearful Saldana. "It was my son's birthday. He was in the hospital." She later added: "That was my son's last birthday before he passed away."

"Did you ever receive the balance?" asked Assistant U.S. Attorney Ali Moghaddas.

"No I did not," Saldana answered.

John Abassian, the first attorney Saldana hired, took the stand next. He explained why he decided to refer her case to Girardi: "He was the godfather of our industry. He was number one, as far as I was concerned."

Abassian was owed $2.8 million of the Saldana settlement money.

"I had to hound him for every amount," he said.

At one point, Abassian was told by one of Girardi's staff attorneys to pick up a check at the Jonathan Club, a social club in Downtown LA. When he got the check, it was made out to both his and Girardi's firm, which meant he needed someone at Girardi's firm to endorse the check. When he went to Girardi's office, he was surprised to find Girardi himself.

"Why do you have this check?" an irate Girardi asked, Abassian recalled. "He went off on me, demeaned me." Girardi said he had bills to pay. "I need this check," he said, and took it.

Girardi's lawyers have sought to shift the blame onto co-defendant Chris Kamon, who headed the firm's accounting department, and who will be tried next year. They've also argued that their client has been mentally impaired for decades. One of the defense attorneys, Alejandro Barrientos, asked Abassian about Girardi's cognitive state at the time of their dealings.

"He would repeat stories sometimes," Abassian said. "There were times you would talk to him, and he wouldn't remember. But he was conscious at all times. He knew what he was doing."

The last witness of the day, Special Agent Ryan Roberson of the Internal Revenue Service, gave a clear overview of the convoluted accounting practices at Girardi's firm.

Client trust accounts are bank accounts controlled by law firms, into which settlement funds and trial awards go into. The accounts then pay the money to themselves, to cover costs and fees, and then to clients. Lawyers are not supposed to use client trust accounts for their own expenses, personal or business. And if the balance of the client trust account drops below zero, the state bar is automatically notified.

According to Roberson's investigation, between 2010 and 2020, Girardi's two client trust accounts received a total of $1.2 billion — though that income began to drop precipitously in 2018. By then, the firm was constantly commingling settlement money from different clients, using new payments to cover old debts, as well as the firm's expenses — and Girardi's. When settlement money from Saldana's case came in, the firm used it to pay back another victim, Joseph Ruigomez, who testified last week. Ruigomez's settlement money had already been used to pay back clients from a previous case.

A shocking amount of money was also siphoned off to Girardi's ex-wife, Erika Jayne, a singer and cast member on the "Real Housewives of Beverly Hills." Between 2010 and 2020, Girardi & Keese paid $21.8 million to EJ Global, Jayne's holding company that was, according to Roberson, "created for her entertainment career." The checks, said Roberson, were marked down as loans, though except for $150,000, none was repaid. At one point, a check from the Girardi & Keese client trust account for $750,000 was written to M&M Jewelers for a pair of diamond earrings for Jayne, which are now the subject of a rancorous legal dispute stemming from Girardi's bankruptcy.

Girardi himself received $26.7 million from the firm's operating account, which also covered a range of lavish expenses, including $12.8 million for private jets and $5 million for a fleet of luxury cars registered to Girardi personally.

Prosecutors said they expect to rest their case on Thursday. The defense's presentation is expected to be short, and the trial will likely wrap up before the end of next week.

Follow @hillelaron

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