L.A. lawyer and son-in-law of Tom Girardi pleads guilty to contempt of court

Los Angeles Times

a day ago

Days after a judge sentenced legal titan Tom Girardi to seven years in prison for stealing from clients, his son-in-law — formerly a high-ranking attorney at his now-defunct firm — pleaded guilty to a federal charge in Illinois.
David Lira, 65, of Pasadena, admitted Thursday to one count of contempt of court for defying a Chicago judge's order concerning the distribution of settlement funds to clients whose relatives had perished in a 2018 Indonesian plane crash.
As part of broader litigation to hold Boeing accountable for defects in its 737-MAX jets, Lira and Girardi negotiated payouts totaling $7.5 million for a group of widows and orphans in 2020. But the clients, who lived in Indonesia, did not receive their full settlements.
Evidence would later emerge that Girardi was routinely using client money to underwrite a lavish lifestyle with his wife, 'Real Housewives of Beverly Hills' star Erika Jayne.
Lira 'knew that Girardi did not pay the Lion Air Clients' settlement funds in full, in contravention of [U.S. District] Judge (Thomas) Durkin's orders, despite [the Indonesian clients'] inquiries about and demands for their Settlements,' according to a plea agreement filed Thursday.
Durkin referred the case for criminal investigation, and prosecutors in Chicago filed wire fraud and other charges against Lira and Girardi in 2021. Prosecutors dropped the Chicago-based case against Girardi, 86, last month. Girardi was separately convicted of wire fraud last year in Los Angeles, resulting in the seven-year prison sentence handed down this week.
Lira, who is married to Girardi's daughter Jacqueline, began working at his father-in-law's firm in 1999. He was sometimes called the firm's senior partner, though Girardi was the sole owner.
Lira resigned from Girardi Keese about six months before its 2020 collapse, after confronting his father-in-law about the Lion Air case and demanding that Girardi pay the victims. As he moved on to another firm, Lira did not alert the victims or authorities about Girardi's mishandling of the money.
Lira's defense attorney, Damon Cheronis, noted that 'the plea agreement did not assert any acts of fraud on the part of Mr. Lira.'
'Mr. Lira continually asked Mr. Girardi to pay these clients their rightful settlement money pursuant to the court order, however Girardi did not,' Cheronis said in a statement.
Lira is scheduled to be sentenced on Oct. 8. Prosecutors have not yet recommended a particular penalty, but they indicated in the plea agreement that under federal sentencing guidelines, Lira faces six to eight years in prison.
Girardi and Lira represented the victims in the Lion Air crash alongside Chicago-based lawyer Jay Edelson. It was ultimately Edelson who brought to the judge's attention that the Indonesian clients were not paid by Girardi.
'We're pleased that David Lira, after years of portraying himself as an innocent bystander, has finally admitted he is a criminal,' Edelson told The Times on Thursday. 'We remain hopeful that the other criminals who helped Girardi pull off the largest Ponzi scheme in the history of the plaintiff's bar will also face disbarment and long prison sentences.'
The widows and orphans ultimately received their settlement payments after Edelson's insurance provider agreed to foot the cost.
The State Bar is pursuing disciplinary action against Lira and two other attorneys who worked at Girardi Keese. Lira continues to practice for a Century City law firm, though restrictions imposed by a bar court judge prohibit him from handling client money.