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In a dramatic turn in the ongoing fallout from Tom Girardi’s downfall, bankruptcy trustees for the defunct Girardi Keese law firm and New York attorney Joseph DiNardo have launched a new lawsuit accusing DiNardo and his associates of misappropriating over $3.1 million meant for a gas explosion victim — and allegedly funneling it into food and beverage ventures.

Filed Thursday in the U.S. Bankruptcy Court for the Central District of California, the complaint paints a picture of a complex web of embezzlement, hidden partnerships, and fraudulent transfers that allegedly link Girardi’s firm to businesses far outside the realm of law — including restaurants and a holding company called CDBD Holdings Inc.

The Alleged Money Trail: From Settlement Funds to Food Chains

According to the lawsuit, the $3.16 million in question represents half of a $6.3 million transfer Girardi Keese made to the DiNardo Law Firm, drawn from a larger $10 million pool of embezzled settlement money.

The trustees allege those funds were then funneled to Christopher Diamantis, a co-owner with DiNardo in an entity called D&D II, which subsequently used the money to bankroll food and beverage ventures — notably, loans exceeding $2.5 million to the Blue Dog eatery between 2013 and 2015.

By 2022, D&D II reportedly assigned its rights to a Blue Dog loan note to CDBD Holdings, a company owned and controlled by Diamantis, without any compensation in return.

“The transfers and the CDBD transfers were made with actual intent to hinder, delay, or defraud creditors,” the trustees allege, adding that Girardi and DiNardo acted while insolvent or pushed themselves into insolvency as a result.

Tom Girardi’s Legacy of Deception

Once celebrated for the $333 million Pacific Gas & Electric settlement that inspired Erin Brockovich, Tom Girardi’s name has since become synonymous with scandal. The former powerhouse attorney was convicted of four counts of wire fraud in August after prosecutors said he stole millions from clients — many of them vulnerable victims of catastrophic injury or loss — to fund a life of extravagance that included private jets, lavish parties, and the career of his reality-TV-star wife, Erika Jayne.

Now, trustees say one of those victims, Joseph Ruigomez, who suffered burns over 90% of his body in a 2010 PG&E explosion, was among those deceived.

The Ruigomez Settlement: A $53M Deal Cloaked in Lies

Court documents allege Girardi lied to Ruigomez, telling him his settlement totaled roughly $7.25 million when it was actually $53 million. Girardi allegedly diverted the hidden millions into personal and firm-related expenses, including payments to other clients to mask prior thefts.

In February 2013, Girardi issued a $5.8 million check to the DiNardo Law Firm, labeled “assoc counsel fees.” However, Ruigomez and his family never retained DiNardo, nor did they authorize any fee-sharing agreement between DiNardo and Girardi Keese.

“The Ruigomez fee-sharing agreement was a disguised financing arrangement,” the trustees said, arguing the deal was a front to divert settlement funds.

DiNardo’s Shady Past and Hidden Deals

The lawsuit also revisits Joseph DiNardo’s own checkered history. After earning his law license in 1973, DiNardo was suspended in 1997 following a tax fraud charge and later pled guilty to a lesser offense. Though reinstated in 2004, he did not return to active legal practice, instead using his firm as a litigation financing vehicle — a move trustees claim enabled backdoor funding and profit-sharing with Girardi.

Between 2002 and 2020, the two attorneys allegedly entered multiple undisclosed fee-sharing deals, all without clients’ knowledge or written consent.

Trustees Demand Recovery of Missing Millions

In late 2022, Chapter 7 trustee Elissa D. Miller demanded the return of the transferred funds and corresponding assets, sending letters and emails to Diamantis and D&D II. But according to the filing, no documents were ever produced, and no funds were returned.

The trustees now seek full recovery of the $3.16 million and damages under fraudulent transfer statutes, claiming that Girardi and DiNardo’s network of payments and shell entities was designed to “hinder, delay, and defraud creditors.”

“This was a deliberate scheme to conceal and misuse client funds,” the complaint asserts. “The beneficiaries of these transfers knew, or should have known, the money’s illicit origins.”

Legal Teams and Case Details

The trustees are represented by Larry W. Gabriel of Jenkins Mulligan & Gabriel LLP and Scott J. Bogucki of Gleichenhaus Marchese & Weishaar PC.

The case is titled Elisa D. Miller et al. v. Christopher Diamantis et al., Case No. 2:25-ap-01378, filed in the U.S. Bankruptcy Court for the Central District of California, tied to the larger bankruptcy case In re Girardi Keese, Case No. 20-bk-21022.

Counsel for Diamantis has not yet been identified.

A Web of Deceit Unraveling

The Girardi Keese $3.2M Settlement suit is the latest chapter in the unraveling of Tom Girardi’s once-mighty empire — a story of betrayal, greed, and legal corruption that has rippled across the nation’s courts.

From courtroom to kitchen, the alleged diversion of funds from burn victims to restaurant ventures offers a grim metaphor for how far justice strayed in Girardi’s orbit.

What began as legal advocacy for the injured has now become a cautionary tale — where trust, power, and millions in settlement money vanished into smoke and fine dining.