The investigation into Erika Jayne’s assets has allegedly uncovered loans she received from her estranged husband Tom Girardi’s law firm Girardi Keese.
According to a motion filed by the bankruptcy trustee investigating Girardi’s law firm, Erika’s businesses received over $20 million in loans from Girard Keese in recent years.
A trustee’s special litigation counsel is working to investigate what happened to millions of dollars in settlement funds that Girardi’s clients never received after Girardi successfully won cases for them.
Legal woes: Erika Jayne’s companies allegedly received $20 million in loans from estranged husband Tom Girardi’s law firm Girardi Keese, court documents have revealed. Jayne, 49, is pictured out on Monday
The bankruptcy trustee says she needs to investigate ‘witnesses who may have first-hand knowledge of this widespread fraud,’ including Jayne’s new landlord Benjamin Khakshour.
Khakshour owns the home that Jayne recently started renting near Beverly Hills for $7,500 a month, after she was forced to move out of the $13 million mansion in Pasadena she shared with Girardi – which has now been put on the market.
‘The Trustee is six months into her administration of the estate, and is beginning to unravel the numerous transactions which may be avoidable and recoverable for the benefit of creditors,’ the document states, according to People.
‘Among the possible assets to be recovered are the millions of dollars of settlement proceeds which the Debtor may have transferred to Erika.’ the document states.
The special counsel has confirmed that ‘settlement funds were diverted to Erika,’ the document states.
Where’s the money: The special counsel has confirmed that ‘settlement funds were diverted to Erika’. A trustee’s special litigation counsel is working to investigate what happened to millions of dollars in settlement funds missing from Girardi’s firm
The bankruptcy trustee says she needs to investigate ‘witnesses who may have first-hand knowledge of this widespread fraud,’ including Jayne’s new landlord Benjamin Khakshour, who owns the house she is now renting near Beverly Hills for $7,500 (pictured)
The filing claims that Jayne’s legal representatives were presented with ‘irrefutable evidence’ supporting the allegations that settlement funds were diverted to her business accounts.
‘The Debtor has admitted in numerous filed tax documents that Erika’s related companies have received over $20,000,000 according to the tax documents spanning multiple years,’ the trustee alleges.
‘Erika has created a new company after the news broke of this scandal which appears to simply be a successor company. Erika has multiple financial accounts and the Debtor’s books show Erika owes large receivables to the Debtor.’
The filing claims that Jayne’s legal representatives were presented with ‘irrefutable evidence’ supporting the allegations that settlement funds were diverted to her business accounts.
Furthermore, the trustee expressed concern that ‘Erika may further dissipate the Debtor’s assets’ if the investigation isn’t conducted rapidly.
It’s complicated: Dinsmore & Shohl LLP – the law firm representing Jayne in Girardi’s Chapter 7 Bankruptcy case – filed paperwork to withdraw as her counsel on Tuesday. Two days later they were back on board but it wasn’t revealed on what basis they decided to work with the reality star again
Time is money: In the court documents, the trustee expressed concern that ‘Erika may further dissipate the Debtor’s assets’ if the investigation isn’t conducted rapidly
‘The necessity to trace her money and investigate the receipt of funds, her purchases including the bling and the glam, (diamonds and high expenditures of beauty maintenance, etc.) has become more heightened by these recent events.’
Dinsmore & Shohl LLP – the law firm representing Jayne in Girardi’s Chapter 7 Bankruptcy case – filed paperwork to withdraw as her counsel on Tuesday.
Two days later they were back on board but it wasn’t revealed on what basis they decided to work with the reality star again.
It was quite the turnaround after the legal firm had originally ‘the relationship of trust and confidence that is essential to a properly functioning attorney-client relationship has broken down and, in the good faith assessment of counsel, the relationship is irreparable,’ in court docs.
Jayne, 49, separated from her 82-year-old husband last November shortly before multiple lawsuits against the high-powered LA attorney were revealed to the public and a month before he was forced into involuntary bankruptcy.
Girardi and Jayne are facing a $2 million class action lawsuit claiming fraud and embezzlement of funds meant for families of victims of the 2018 Lion Air Flight 610 crash, in which all 189 people onboard died.
‘The necessity to trace her money and investigate the receipt of funds, her purchases including the bling and the glam, (diamonds and high expenditures of beauty maintenance, etc.) has become more heightened by these recent events.’ the trustee stated
So long: Jayne, 49, separated from her 82-year-old husband last November shortly before multiple lawsuits against the high-powered LA attorney were revealed to the public and a month before he was forced into involuntary bankruptcy
Girardi and Jayne are accused of using that money to fund their own lavish lifestyles and allegedly pay off loans to keep Girardi’s law firm afloat.
Edelson PC, a firm acting on behalf of Girardi’s ex clients, said in court docs their divorce last fall was orchestrated to ‘fraudulently protect Tom and Erika’s money’ as they’re ‘on the verge of financial collapse.’
In December Girardi was also sued by his former law firm partner Robert Keese to dissolve their business venture, 1126 Wilshire Partnership.
Keese and other attorneys alleged that Girardi did not pay them the estimated $315,000 they earned from the partnership, instead pocketing the cash ‘for his own personal gain.’
Girardi’s firm is also being sued by Wells Fargo for allegedly not paying monthly payments for rent, taxes, fees and more on their office. According to the paperwork obtained by Us Weekly, the group owes Wells Fargo $882,000.
Keeping up: Girardi and Jayne are accused of using that money to fund their own lavish lifestyles and allegedly pay off loans to keep Girardi’s law firm afloat
The bank is also seeking interest at 10 percent per annum from the date of default and wants to seize Girardi Keese’s Los Angeles and San Bernardino, California, properties.
Girardi was diagnosed with Alzheimer’s and dementia in March, the same month his legal license in California was revoked.
His brother, Robert Girardi was named his conservator amid his health issues.
In September 2020 he told a judge during a deposition, ‘At one point I had about $80 million or $50 million in cash. That’s all gone. I don’t have any money,’
Jayne has claimed she knew nothing of Girardi’s financial and legal woes until late last year when the lawsuits hit.
Under conservatorship: Girardi is also being sued by former partners and Wells Fargo in separate lawsuits. He was diagnosed with Alzheimer’s and dementia in March, the same month his legal license in California was revoked
An ABC/ Hulu documentary, The Housewife and the Hustler, was released this month covering the scandal.
In it, attorney Sunny Hostin pointed out that Jayne is seeking to have her high-dollar items classified as ‘separate property’ in their split, claiming they were ‘gifts to her.’
The doc featured interviews with former clients accusing Girardi of financial theft in their cases, and noted Jayne’s involvement in an LLC he had, with some funds allegedly being routed to her company EJ Global.
Reporter Brandon Lowrey of Law360 said in the doc that the estranged couple is ‘together in these bankruptcy proceedings’ and that ‘it’s going to be hard for her to say she didn’t know that anything was going on.’
On the market: The former couple have listed their $13 million mansion in Pasadena as part of the involuntary bankruptcy case