A Chicago class action law firm, which has routinely targeted businesses for violations of privacy law and other claims, has now taken aim at fellow personal injury lawyer Tom Girardi and his wife, Real Housewives of Beverly Hills TV star Erika Jayne, accusing them of stealing untold sums of money from a settlement intended for the “orphans and widows” of the victims of a plane crash to fund their “lavish Beverly Hills lifestyles.”
On Dec. 2, attorney Jay Edelson and his firm, Edelson P.C., filed suit in Chicago federal court against Girardi, Jayne, Girardi’s fim, Girardi Keese, and a number of other defendants.
The lawsuit centers on the handling of an otherwise confidential settlement the Edelson firm assisted Girardi in securing in early 2020 from aircraft maker Boeing on behalf of families of victims of the crash of Lion Air Flight 610, which went down off the coast of Indonesia in 2018, killing 129.
Jay Edelson of Edelson, PC
Litigation over that plane crash continues in Chicago courts and elsewhere against aircraft maker Boeing, and others.
In the complaint, Edelson claims Girardi embezzled much of those funds, preventing much of the settlement from being paid to the crash victims’ families and to the Edelson firm for its services in securing the payment from Boeing.
Edelson asserts the alleged embezzlement is the latest in a pattern of behavior from Girardi, which the Chicago law firm compared to the Ponzi scheme executed by convicted New York financier Bernie Madoff.
The lawsuit asserts Girardi’s personal and professional finances are in a “downward spiral,” as evidenced by Girardi’s “mounting loans and debt (which) have piled up to such an extent that GK (Girardi Keese) can no longer meet its financial obligations and it is likely that GK will soon not be a going concern.”
Girardi, for instance, faces legal claims in California court from lawsuit financing companies seeking to recover funds loaned to Girardi, allegedly to continue financing more lawsuits.
Edelson asserts Girardi has instead used those lawsuit loans to finance his and his wife’s “spending habits.” The complaint, for instance, notes Jayne has admitted to a $40,000 per month spending habit, while pointing out the couple’s history of lavish gifts to each other, including a $5,000 toilet, a $250,000 Lamborghini automobile and a piece of jewelry that Jayne has indicated may be worth even more than her Lamborghini.
The complaint also notes Girardi has “a standing reservation and exclusive table at Morton’s Steak House in Los Angeles, routinely flies on private jets, and owns multiple homes across the country.”
The complaint asserts the spending practices are all in an attempt to “project a public image of obscene wealth at all times, and at whatever the cost,” to keep up the image they portray on television.
To further increase their available cash, Edelson claims the Girardis have begun converting settlement funds, including the funds from the Lion Air settlement, for their own personal use.
Edelson claims the Girardis have then taken various finance and legal measures to shield those funds from being claimed by the courts. Edelson said, for instance, Girardi has transferred funds from his firm through various “loans” to a company owned by Jayne.
Further, Edelson accused the Girardis of using “sham” ongoing divorce proceedings merely as a legal vehicle to again allow Jayne to lay claim to the funds, including proceeds from the Lion Air settlement.
Edelson also claims Girardi has reached deals with certain creditors, some of whom are named as defendants in the complaint, to use Lion Air settlement funds to pay down some of those loans, “in a Madoff-inspired attempt to protect his own wealth and appease his aggressive well-heeled lenders.”
Prior to filing the lawsuit, Edelson said in a tweet from his personal account that he “never wanted to bring” a complaint such as this one. He further said he was “getting push back from” his fellow plaintiffs’ lawyers, because “this will lead to increase scrutiny (sic) and more regulation over us.”
Edelson followed the complaint with another filing in the ongoing Lion Air case against Boeing, asking the court to order Girardi to provide evidence why he should not be found in either civil or even criminal contempt of court for his alleged conduct.
In his complaint, Edelson is asking the court to require Girardi and the other defendants to account for the Lion Air settlement funds, and ensure all of those funds are placed into a trust, and then paid to the Lion Air Flight 610 victims families and to the Edelson firm for its work on that case.