Boeing Sent $7.5 Million For 737 MAX Crash Families. Their Lawyer Stole $3 Million—Now His Associate Wants Probation

The final attorney from the firm Girardi Keese is awaiting sentence over the missing Lion Air settlement money, asked a federal judge Thursday to give him probation. Keith Griffin pled guilty in March to criminal contempt. He is scheduled to be sentenced August 6, and prosecutors agreed not to recommend more than four months in prison for his role in the scheme to defraud families of Boeing 737 MAX crash victims. He didn’t steal the money himself. He didn’t control the firm’s trust account. Instead, he admitted knowing for eight months that millions of dollars belonging to families of Lion Air Flight 610 victims had not been distributed, even though a federal judge had ordered the firm to pay them, and he helped conceal this. Lion Air Flight 610, a Boeing 737 MAX 8, crashed into the Java Sea 13 minutes after departing Jakarta on October 29, 2018. All 189 people on board were killed. Erroneous angle-of-attack data triggered repeated nose-down commands from the plane’s MCAS system while the pilots struggled to maintain control. Relatives of the victims sued Boeing in federal court in Chicago. Girardi Keese represented some of the families, with Griffin working on the cases though not as counsel of record. The cases settled in 2020, with Boeing wiring $7.5 million for four clients. The judge ordered the money sent to the clients as soon as practicable, and under the settlement agreements within 30 days. Instead, Girardi Keese began making partial payments only after the families started asking where their money was. $3 million was missing. I first wrote about the missing money in December 2020, when Tom Girardi was being accused of embezzling settlements to maintain the lavish lifestyle he shared with “Real Housewives of Beverly Hills” star Erika Jayne. The allegations turned out to understate what was happening. Girardi was once among the most powerful plaintiffs’ lawyers in the country. He helped litigate the case made famous by Erin Brockovich. It turns out the firm was a Ponzi scheme, using money belonging to new clients to cover obligations to clients whose settlements had already been stolen. The firm held off payments to the Lion Air families with excuses about problems with Boeing, complications caused by the pandemic and tax issues that required dealing with the head of the IRS. These were all fabricated. Legal associate Griffin’s defense is that he actually pushed Girardi internally to pay the families (Girardi responded that it was “above your pay grade”). However, He knew the court’s orders were not being obeyed. He did not disclose the full situation to Judge Durkin or to co-counsel. And misled them about the funds. Judge Durkin effectively deemed Griffin to have been participating in the cover up. The Firm Was Diverting Client Money Settlement funds are supposed to remain segregated in a client trust account until they can be paid to the client. At Girardi Keese, the trust account became a source of working capital. The Lion Air money was diverted to law firm payroll, operating expenses and payments to other clients whose own settlement money had already been misappropriated. New settlements kept earlier victims from discovering that their money was gone. Prosecutors proved that more than $25 million went to expenses of Erika Jayne’s entertainment company, while additional firm money paid for private jets, jewelry, luxury cars and clubs. What Happened To The Lawyers Tom Girardi was convicted on four wire fraud counts involving other clients. He received 87 months in federal prison and was ordered to pay $2,310,247 in restitution. Prosecutors dismissed the separate Lion Air charges after that sentence, but presented the Lion Air theft to the sentencing judge. Christopher Kamon, the firm’s CFO, pled guilty to wire fraud for helping Girardi embezzle the Lion Air settlement money. He received 65 months, concurrent with a 121-month California sentence for the broader scheme. David Lira pled guilty to criminal contempt and was sentenced to four months in prison, four months of home confinement and 200 hours of community service. Keith Griffin also pled guilty to criminal contempt. Prosecutors may recommend up to four months, while he’s asking for probation. How The Families Got Their Money The families ultimately received their settlement funds – through an insurance settlement arranged by co-counsel. The loss shifted to the other firm’s insurer after the original money disappeared. Edelson PC was Girardi Keese’s local co-counsel in Chicago. They never held the funds, and were found not to know that the money was being stolen. And they waited months after learning that payment was delayed before alerting the court. So their professional liability insurance covered the shortfall to settle claims that they failed to supervise or protect client funds, to act promptly, and breached their duties to their clients. The families lost relatives in an aviation disaster, then after Boeing settled their claims and sent the money, the lawyers victimized them again by keeping the cash. They eventually got the money, exposing the firm’s broader scheme. Topics on this page