AFTER THE FALL : Trusted Attorney Giometti Tells How His Legal Troubles Began
Two years ago Gene Giometti seemed to be flying high.
He had a thriving legal practice and the trappings of wealth, including three fancy cars. He was a former president of the Glendale Bar Assn. and a Chamber of Commerce “man of the year.”
That was then. Now Eugene M. Giometti, 40, is unemployed, broke, exiled from Glendale society, divorced from his wife and about to face a preliminary hearing on criminal charges that he stole more than $150,000 from his clients.
“It’s a humbling experience to go through to the point where I am now,” Giometti said last week in his first interview since an investigation began last year.
Giometti said his downfall resulted from drinking brought on by business and social pressures.
Among the nine people Giometti is suspected of defrauding are a 52-year-old Newhall housewife he represented in a personal injury suit and two widows who entrusted their husbands’ life insurance money to him.
He is charged with 25 counts of embezzlement, grand theft and forgery. If convicted, he could face 10 years in prison. He allegedly took the money over a two-year period by forging his clients’ names on checks and embezzling from their trust funds. At an arraignment on Aug. 7, Giometti pleaded not guilty; a preliminary hearing was scheduled for Sept. 18. He was released on his own recognizance.
Lost Control of Practice
That came on the heels of one of the rare times that a local bar association has used a state law to take control of an attorney’s practice and have him declared incapable of practicing law.
“It’s something I hope to God that we never have to resort to again,” said Glendale bar President Denis O’Rourke.
Cases like Giometti’s are rare but appear to be on the increase. In 1985, 2,361 lawyers nationwide were disciplined for misconduct, up from 1,594 four years earlier, according to the American Bar Assn. Lisa Mallord, its ethics counsel, said she believes accusations of lawyers embezzling from their clients have been cropping up more frequently, although the group doesn’t keep figures on specific kinds of misconduct.
In California, 360 of the 82,000 licensed attorneys were disciplined last year, compared with 285 in 1981.
Giometti had a lucrative family law and personal injury practice. He was bar association president in 1980-81 and participated in civic activities from Little League coaching to chairing the Glendale Adventist Medical Center Foundation, one of the city’s more prestigious charities.
He had a charismatic personality and an unerring ability to link himself with movers and shakers, acquaintances say. He was the kind of man, one Glendale official remarked, who would shake your hand while looking over your shoulder to see if anyone more important was around.
Giometti whizzed around town in his Porsche, his BMW or his Mercedes-Benz, stopping to dine at fancy eateries or drink at trendy bars. He was a must-guest at charity functions and social gatherings. For relaxation he headed to ski resorts in Colorado.
In 1983 the public visibility and community activities paid off with the chamber of commerce award.
“He was a super guy,” said Julie Burroughs, chamber membership director. “He won the title because he was so well-rounded.”
Some of those who watched Giometti accept the honor at a luncheon remember how proud he was and how most people agreed that he deserved the tribute. Now people are wondering how an attorney whose career soared so high could have fallen so low.
“As an attorney you have the feeling as, how could you ever have let this happen?” said E. Bonnie Marshall, a lawyer who worked for Giometti and discovered the discrepancies in his clients’ accounts.
Eyes Take on Faraway Look
During the interview last week, Giometti was seated in the Glendale office of his attorney, Richard J. Helphand. He wore jeans, a short-sleeve golf shirt and Reebok sneakers. At times he would stare out the office window at the city’s skyline, his green eyes taking on a faraway look.
All his life he had been a winner, a leader, he said, until running his own business got to be too demanding both financially and mentally. He and his wife grew apart, and outside activities were draining him, he said. In addition, he said, he was drinking.
Giometti is charged with spending his clients’ money beginning in 1983. He said that in 1985 he realized he had been acting improperly.
Although he wouldn’t comment on specific charges, he said: “I was using funds that were not mine. I was then replenishing those funds. I wasn’t taking anybody’s money for my own benefit. I wasn’t going to keep the money. I think a lot of my conduct in my own mind was rationalized because I was drinking.”
Some people who were close to Giometti remember it differently.
“I know Gene. We were friends, and the guy had no alcohol problem, no drug problem,” said Lawrence Taylor, an attorney who rented office space from Giometti. “He just lived very high. Everybody’s so damned anxious to make excuses for him. The guy is a goddamned thief.”
Taylor reported Giometti to the authorities.
Thomas Simpson, a Glendale attorney whose friendship with Giometti dates to their days in law school, said: “Gene’s image was kind of important to him. He was a pretty fast and loose spender. To him everything was rosy. He was just rewarding himself for all the hard work.”
As the case proceeds against him, Giometti said, he hopes to get a job and try to pay his creditors. He does not plan to declare personal bankruptcy, he said, and he would like to spend more time with his children.
“Of all the things that have happened to me, the inability to be with my children on a day-to-day basis has had the biggest toll on me,” he said. “I kept everything within, and whether it was athletics or whatever, I wanted to be the best.”
Since records of the bar association’s legal proceeding against him were unsealed in Superior Court in March, Giometti has virtually disappeared from public life. But the public record has grown.
Lawsuits have been filed against him by creditors and ex-clients. The Internal Revenue Service, claiming that Giometti withheld $39,663 in taxes from his employees and kept the money, has placed a lien against the home of his former wife and their four children and has threatened to seize the property.
‘Don’t Have Anywhere to Go’
“We don’t have anywhere else to go, and Lord knows I can’t afford to come up with $40,000, especially when you only make $17,000 a year,” Mary Anne Giometti said in a recent interview.
Mary Anne Giometti, 37, is fighting the IRS’ attempt to take her house, which her lawyer said she got as part of the divorce settlement. She has appealed to local politicians to help her, saying her family is the victim of her husband’s misdeeds.
But the IRS, aside from agreeing to examine her claim to the house, shows no sign of backing off.
“We’re talking about employee money here,” said Lowell Langers, an IRS spokeswoman.
Eugene Giometti declined to comment on the IRS’ allegations.
Mary Anne Giometti, who took a job recently for the first time in 13 years, is being sued for $10,000 for a business loan she co-signed with Giometti. She said her ex-husband hasn’t paid child support and alimony since February.
Meanwhile, the state Supreme Court is scheduled to act soon on Giometti’s removal from the state bar. He has moved to his elderly parents’ home in Stockton, where he grew up. His father was a grain broker, his mother a registered nurse. Throughout his school years he played sports and participated in student organizations, he said.
In 1964 Giometti entered the University of Santa Clara, a small Catholic institution. His personality drew people to him, Simpson recalled. Giometti assumed leadership roles in social clubs and student government. He also played baseball and football until a knee injury sidelined him in his sophomore year, ending his dream of a professional baseball career.
Giometti met Mary Anne Gallagher at Santa Clara in 1967 and married her two years later. He received his business degree in 1968 and his law degree from the same university in 1971. He was hired as a law clerk by Melby and Anderson, a prestigious Glendale law firm. When he passed the California bar examination in 1972, he became an associate in the firm.
Giometti worked himself up to a partnership within four years. He joined the Jaycees and later the Verdugo Club, a well-known social organization for businessmen.
Giometti, who had been president of the Jaycees in 1975, received the organization’s 1977 Distinguished Service Award.
“We all kind of looked up to Gene as sort of a big brother,” said Carvel L. Gay, owner of a Glendale towing service and a former Jaycee. Giometti became well-known in Glendale. His hangouts were Gennaro’s Ristorante and Jax Bar and Grill, two popular spots.
Started Own Firm
In 1981 Giometti announced that he was leaving Melby and Anderson to start his own firm. He borrowed thousands of dollars and leased and furnished a $48,000-a-year office suite in a downtown Glendale high-rise.
Partner Jarrett Anderson said that Giometti’s departure was not entirely voluntary. He declined to give details, saying the firm had agreed in writing not to discuss the matter.
In 1982 Giometti held an open house at his new office. Champagne flowed; a chef carved roast beef, and more than 250 guests mingled to celebrate.
Giometti later hired three lawyers and about eight staff members. Taylor, a law professor, said Giometti approached him about forming a partnership, but he decided to rent space instead and operate his own criminal practice.
The firm operated under the name Giometti, Powell and Taylor, but Giometti was the sole proprietor, his associates said. The associates in the firm grew close and the office took on a family atmosphere, they said.
About that time he started dating other women, Giometti said. “There was nobody in particular,” he said. “I’d meet people in bars and maybe have drinks or dinner or something of that nature.” He also became more of a big spender, dining out, traveling and partying more, his ex-wife said. And it seemed to her that he was drinking more than usual.
Home Falls Into Disrepair
“He drank when he was home or he just didn’t come home,” Mary Anne Giometti said. She said she had to plead with him for money to pay the bills. He maintained the expensive office while his own home fell into disrepair, she said.
No one, including Giometti, would estimate how much money he was earning or how much it took to run the firm. Giometti said heading the business was much more expensive than he had anticipated.
Marshall said: “Gene went very rapidly from being a partner in another firm to setting up his own practice. He grew very, very rapidly, probably too rapidly.”
She said she had no reason to suspect that Giometti had any problems paying his bills.
But money was being taken from clients’ accounts as early as the first few months of the business, said Glendale Police Detective David O’Connor, head investigator on the case.
He said Giometti embezzled the money by diverting it from trust funds to his private accounts or by forging his clients’ names to insurance checks and using the money for his business or personal use.
“Like most white-collar crime it was not a difficult thing to do because you’ve got that trust built up. People were walking in giving him money,” O’Connor said. “It was literally like having a license to steal.”
Tells Client Not to Worry
Drew Delgado of North Hollywood said that when she gave Giometti a $62,000 life insurance check in 1982 so he could set up a trust fund for her, Giometti said: “Don’t worry about a thing, dear. I’ll treat this money as if it were my own.”
Giometti is accused of embezzling most of that money as well as a second insurance check for $67,000 that Delgado put in a trust fund for her 6-year-old son. The money was from life insurance policies owned by Delgado’s husband, who was killed in 1982 in a robbery at his North Hollywood bar.
“I didn’t think I had to be hovering over him,” Delgado, now a waitress, said of Giometti. She has filed a $2.5-million lawsuit against him.
Also named as a victim in the criminal complaint was Phyllis A. Bedell, a 51-year-old housewife who said she retained Giometti in the late 1970s to draw up her will.
In June, 1982, Bedell was in a Newhall business parking lot when a car drove by. Her purse was snagged by the car’s mirror and she was dragged several feet, she said.
Bedell sued and settled for $29,000, she said. Giometti is charged with forging her name to the insurance settlement check and keeping the money.
Doesn’t Know Fate of Money
“I don’t know if I’m ever going to get my money back,” Bedell said. “I’ve been ill lately, and I haven’t been able to keep up with what’s going on with this case.”
In November, 1985, Giometti tried to cover one such alleged embezzlement, authorities charge. He gave a client a $15,000 check from his account to cover an insurance check he is accused of forging. The check bounced.
The fact that money was missing from clients’ accounts was discovered late last summer when Marshall and a second attorney in the firm examined Giometti’s books. At least $20,000 was unaccounted for, Taylor said. Employees noticed that Giometti seemed to be around the office less and less and the other attorneys began to receive frantic calls from clients. “Gene became a phantom,” Taylor said.
Meanwhile, Mary Anne Giometti asked for a divorce, and Giometti moved to a hotel. But before he left, his wife gave him something: the name of a psychologist who helped professionals deal with alcoholism. “I was in bad shape,” Giometti said. He still sees that psychologist, his lawyer said.
According to court records, Giometti began missing court appearances and filing deadlines and stopped paying some of his employees starting in the summer of 1985.
Confronted by Attorneys
In late October, Taylor, Marshall and a third attorney went to Giometti’s hotel room and confronted him with their suspicions.
Those involved say it was an emotional scene, with Giometti incoherent and his associates demanding an explanation. After two hours Giometti broke down, cried and said he had been using clients’ funds, they said.
“I gave him one week to pay back the money, which he promised to do,” Taylor said.
When he did not, Taylor notified the state bar, the district attorney’s office and the Superior Court in Glendale. O’Rourke, the Glendale bar president, set up a three-member investigative committee to look into the allegations.
In January the committee concluded that “due to mental or emotional illness arising at least in part from excessive use of alcohol” Giometti was incapable of handling his practice.
The committee found that Giometti had neglected his clients’ cases and all but emptied the firm’s trust accounts.
Giometti’s practice was placed under the jurisdiction of the Los Angeles Superior Court under a law that allows such action if it can be proven that a lawyer’s conduct is endangering the cases of his clients.
Told to Remove Belongings
The court ordered Giometti to remove his private belongings from his North Maryland Avenue office, which he was not allowed to enter without another lawyer as an escort. A police investigation began.
Marshall and the other associates closed the practice, writing to clients and making appearances in Giometti’s cases.
Giometti withdrew from Glendale society, resigning from civic organizations.
In March he resigned from the state bar. That move allows clients who say they lost money to seek reimbursement from the California State Bar’s Client Security Fund, which repays individual losses up to $50,000.
According to William W. Davis, the state bar investigator on the case, Giometti’s chances of practicing law again are “slim.”