Tom Girardi Found Guilty of Embezzling Millions from His Clients. So What Does This Mean for Erika Girardi?

Disbarred former personal injury lawyer Tom Girardi was convicted on Tuesday, Aug. 27 of embezzling more than $15 million from his clients, with a federal jury in Los Angeles finding the 85-year-old guilty on four counts of wire fraud.

It was a verdict that was a longtime coming for Real Housewives of Beverly Hills fans, who have been invested in the case against Tom ever since his legal troubles began making headlines not long after his estranged wife, Erika Girardi, filed for divorce in November 2020.

For the years since, the conversation in the court of public opinion has centered around how much Erika knew and her level of responsibility for reimbursing Tom’s alleged victims. The debate even transferred to RHOBH, where the Bravo cameras captured Erika’s costars grilling her about her apparent lack of empathy and questioning why she wasn’t turning over her assets.

But legally, Erika — who has insisted she had no knowledge of Tom’s crimes — has remained in the clear. Despite battling an onslaught of civil lawsuits, many of which she has won, there has not been any federal indictments targeting Erika.

So does Tom’s latest guilty verdict change that?

Erika Girardi.

Jerritt Clark/Getty

To answer that question and more, PEOPLE turned to Emily D. Baker, a lawyer and former L.A. Deputy District Attorney who has amassed a huge following online for the legal analysis and commentary she provides on the biggest cases across entertainment and beyond. A longtime follower of the Tom Girardi saga, Baker goes into depth about the cases, where things stand with his debts and why he and Erika’s divorce likely won’t be settled anytime soon.

PEOPLE: Let’s start with the big question right off the bat. This verdict against Tom — what does it mean for Erika?Baker: So Erika only was discussed in this federal case as to where the money might’ve gone. If you remember, Erika famously denied on the show that money went directly from Girardi Keese, Tom’s now defunct law firm, to EJ Global, the company associated with Erika’s music career, Erika Jayne. But the feds showed in court that money did, in fact, do just that. Now, that doesn’t mean the money went into Erika’s pocket, but that does mean that Erika benefited from Tom’s theft. Girardi Keese was paying for her career — the lavish lifestyle, the music videos, the costuming (or not paying for the costuming, given allegations from the MARCO MARCO lawsuit)…

But Erika was not charged here, just Tom.Right, Erika was not charged. Erika is not a target in this, and it doesn’t seem she will be. There will likely be other arrests in this case, but those will be related to the Los Angeles prosecution of other attorneys in the firm, not Erika.

Tom Girardi and Erika Girardi on ‘The Real Housewives of Beverly Hills’.

Bravo

Tom’s guilty conviction makes him responsible to pay back the money he stole from his victims. Will Erika be on the line for any of that too? No, the federal government won’t be going after Erika for that. That’s what the civil lawsuits she has been battling have been doing. There is a federal forfeiture order, so the feds will try to find money to forfeit. But there’s not a lot of property left for Tom Girardi because it’s all in the bankruptcy, which is where the financial restitution becomes very complicated.

However, Tom and Erika Girardi have been separated legally since 2020. That’s why this order coming in now is not going to be something she’s required to pay as a debt in the marriage, because they are already separated. The divorce is on hold because of the conservatorship that he’s under, but still — since they’re legally separated, this debt is not her debt.

The bankruptcy is a different story though? That debt is her debt? Yes, the bankruptcy of Tom Girardi — because there’s also the bankruptcy of Girardi Keese, which is different. In the bankruptcy of Tom Girardi, debts that aren’t paid won’t be discharged or written off or erased. Erika will still be responsible for those because those were incurred during marriage, including tax liabilities and things like that. The bankruptcy is Erika’s biggest problem.

And settling the divorce won’t change that?No, because there’s not going to be much left to settle with the divorce. But even in settling the divorce, it’s not going to get her out from under it.

Tom Girardi and Erika Girardi on ‘The Real Housewives of Beverly Hills’.
Bravo

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Will the divorce be settled anytime soon?I don’t think there is an optimistic chance that the divorce gets resolved before he is sentenced. The divorce is very much held up because of the conservatorship. It seems more likely that once the bankruptcy is done and there’s a more realistic view of what the remaining debts are, then some movement can happen in the divorce. There’s nothing she can do to force the divorce forward until then.

She just has to sit back and wait.Exactly. Erika is in a very legally difficult situation. It’s going to take awhile. And she’s likely not going to be able to get spousal support from Tom or say those martial debts should be Tom’s, so it’s going to be tough. I am sure she and her lawyers are talking about the outstanding tax liabilities as well. So the financial crater for Erika is a long way from done, and we might see it resulting in her needing to also file for bankruptcy once the Tom Girardi bankruptcies are done. That wouldn’t surprise me.

Erika Girardi in a promo shot for ‘The Real Housewives of Beverly Hills’.
Bravo

If she files for personal bankruptcy, would that get her off the line in paying these debts?It’s so complex. Oftentimes, you file a bankruptcy to resolve debts that you cannot pay and then, at the end of bankruptcy, all of those debts are normally discharged. Whether they get paid for pennies on the dollar or whether they get erased entirely depends on a lot of rules. But tax liabilities, those cannot be discharged. So getting rid of the consumer debt, credit card debt, debt to the vet and the gardener, etc. — getting rid of those would allow her to make a plan with the Franchise Tax Board and the IRS. I’m sure she and her lawyers are talking about that.

This is what I would do if I was the attorney. I suspect it’s part of why she’s fought so hard in the bankruptcy for her property, because she is going to be stuck with those tax debts. Those do not go away. The government always gets theirs. “Death and taxes” is a saying for a reason.

And if Tom dies before any of this is resolved?It doesn’t change anything with the debts. Because again, they’re marital debts. The position that they’re in now and the position that they’d be in if he dies isn’t much different. It just makes the filings on the divorce a little different. It would resolve the divorce, it wouldn’t resolve the debts.

Erika Girardi at BravoCon 2023 in Las Vegas.

 Nicole Weingart/Bravo via Getty

Erika, it should be said again, has maintained she knew nothing about Tom’s crimes. She’s faced a slew of civil lawsuits and has scored legal wins in many of them, including a 2022 one where a judge ruled the prosecution failed to prove she was “aiding and abetting” her ex. Do those wins help her in other cases? Yes. These cases have shown it’s very difficult to prove that Erika knew where that money was coming from. And they can’t really go after money that she’s making now or substitute those assets for older assets to get Tom’s victims paid.

Tom won’t be sentenced until December, and prosecutors are saying he could get upwards of 80 years in prison — 20 years for each count. How is that final decision determined? In federal sentencing, the Department of Prisons do a really thorough pre-sentencing report independently. Then, the attorneys for both sides can challenge the report or add information to the report in their sentencing memorandums; they can ask for the report guidelines to either be aggravated up or mitigated down; and then, recommend what sentence they would like the judge to choose. The judge is not bound by most of that, and can choose anything within the legal range to sentence Tom Girardi to. But the government is looking to show the judge a pattern of behavior here.

That pattern of behavior, is that limited to just the four victims of Tom’s who were a part of this federal case? Because Tom still faces federal wire fraud charges in Chicago, stemming from the allegations that he pocketed over $2 million from family members of victims of the 2018 Lion Air crash. Does that factor into the sentencing here too? Oh, as Bethenny Frankel would say, they can literally “mention it all.” The government is not limited just to the charged victims for the sentencing memo. They can talk about the Lion Air case, they can bring in more victims that complained to the state bar… they can reach back decades to show he’s been doing this all along.

Tom Girardi in June 2014.

Irfan Khan/Los Angeles Times/Getty

What about his health? In 2021, Tom was diagnosed with dementia and late-onset Alzheimer’s. A year later, he moved into a “restricted memory care unit.” As you mentioned, his brother, Robert Girardi, has been been named the official conservator for Tom and his estate. Does any of that come into play? When the judge ruled back in January that Tom was competent for trial, the judge did make notes that she thought Tom was malingering and exaggerating his symptoms of mental decline. The crux of the defense argument was that Tom was so impaired that he couldn’t form the intent to commit these crimes (i.e. “Oh, he didn’t know what he was doing and if he misplaced some money, he didn’t mean to do that”). But the judge ruled that any cognitive impairment was age-typical — not in fact, Alzheimer’s or dementia. And the jury agreed with the judge in their guilty conviction. So I think age will be a factor, but not any of these supposed health issues.

The judge allowed Tom to remain free until sentencing. Do you think he’ll do time? I think the government will argue that this is a person that belongs in prison. And then the defense will bring up his age and the fact that he’s never had any convictions before or never been in trouble before as reasons to say he shouldn’t go to prison. And the federal government will say, “Well, he was bribing the state bar and everybody else. If not prison for him, then for who?”

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Tom Girardi on Aug. 6 in Los Angeles.

Myung J. Chun / Los Angeles Times via Getty

So if he does time, how long do you think it’ll be? What we’ve seen trending with federal judges in fraud cases is that prison sentences are more of the norm, though maximum sentences are very much not the norm.

In the case of Sam Bankman-Fried, who was in charge of the FTX collapse, he faced a maximum sentence of 110 years but was sentenced to 25 years (even though there was over $100 million in loss). Now, he was stealing from savvy investors; Tom Girardi was stealing from clients, like Alex Murdaugh.

Murdaugh was sentenced to 40 years in federal prison for multiple fraud schemes. And the judge’s ruling on that sentence was scathing about how he took advantage of “the most needy, vulnerable people.” Judges do not like lawyers that steal. It makes the profession look bad, and if you cannot trust lawyers to be ethical with their clients, it undermines the entire legal system of our country. Judges are very mindful of that, no matter what your age is.

That’s why I think the government will show that these bar complaints go back 40 years. They’re going to argue, “This behavior didn’t start in 2017, it started shortly after he became a lawyer.”

Do I think he will get 20 years even, which is the max for just one of the counts? Probably not, given his age. Do I think any prison sentence will be a very difficult, rude awakening for him? Yes, absolutely.

Tom Girardi exits the federal courthouse in downtown Los Angeles with Natalie Degrati, an investigator with the federal public defender’s office, after he was convicted on Aug. 27, 2024.

Brian van der Brug / Los Angeles Times via Getty

Going back to that Chicago case, that will happen after he’s sentenced in this trial? Yes, he’s going to get sentenced on this and still face trial in Illinois on the Lion Air case. And that case is with [former Girardi Keese lawyers] Keith Griffin and David Lira, who are also targets in Los Angeles. So we are not done with people getting pulled into prosecutions. And the Girardi Keese chief financial officer prosecution is still pending in Los Angeles and in Illinois, too…

That’s Chris Kamon, who has been charged separately from Tom and has pleaded not guilty. Defense attorneys in Tom’s case this month really seemed to blame the thefts on Kamon, arguing that Tom was just a figurehead and Kamon really made those decisions. Yep, that’s the “empty chair” defense — a.k.a. the “some other dude did it” defense or the “Shaggy, It Wasn’t Me” defense. Basically you point to an empty chair and say, “Ladies and gentleman of the jury, this other guy did all these bad things but he’s not here so you can’t hold my guy responsible.” When one defendant is not present in trial, the strategy is always to blame the person that’s not there. That’s when the prosecution sits back and goes, “Right, convict them both then.”

Are those the end? Or will there be more lawsuits to come for Tom Giardi?I don’t know if it will open up more lawsuits. This seems to be the full scope.

Unique Nicole/Getty

Is the guilty conviction in this case justice for all of Tom’s alleged victims? I have to wonder if it’s bittersweet because it’s a little “too little, too late.” The client victims of Tom Girardi needed the money when their settlements happened. They needed to cover their medical bills, to modify their homes, to take care of themselves. And instead, they ended up spending years (if not decades) fighting to get the money that they were owed. While their attorney was spending it like water, on jets and music videos and American Express cards. Some of them will never be paid in full. Putting Tom in prison in his 80s doesn’t change that reality for them.

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Erika Girardi Reveals She Contemplated Suicide ‘Many Times’ During Tom Girardi’s Legal Troubles

Erika Girardi in November 2019.
Paul Archuleta/Getty Images

What do you think, if anything, is the takeaway lesson from Erika’s side?Know who you’re married to. I don’t think she ever saw this going this way, and the very real debt that she is going to be facing has to weigh on her. It’s why, I imagine, we see her staying on Real Housewives and in the public eye, because she has to work. She does not have a choice. And the person I’m sure she thought was going to provide for her, as many do when they get married, was not that person.

In many ways, that’s a tale as old as time when it comes to marriages we’ve seen on Housewives.It is. And I wonder if, in the long run, we’ll see people choosing not to get legally married and instead just be like, “We’re partners, we live together, we’re committed, but I’m not intertwining my financial life with your financial life.” Because once you marry someone, aside from whatever prenup you have, what’s theirs is yours. And that includes debt.

For more from Emily D. Baker, follow her on YouTube and Instagram; listen to her official podcast, The Emily Show; and download her Law Nerd app.

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Source: HIS Education