Corruption runs deep in Los Angeles.  It appears that the investigation into Tom Girardi is starting to peel back the layers of inside involvement by a government official and private individuals who conspired with Girardi and his law firm.  Last week, the head of the FBI’s Los Angeles field office formally recused himself from the federal investigation into fraud and corruption by Tom Girardi and others at his now defunct law firm.

Donald Alway, assistant director in charge of the L.A. office, sought recusal from the high-profile investigation after the Los Angeles Times and other news outlets reported that his mother, Michelle Alway, was a former girlfriend and secretary of Girardi.  Public records show that she and her son own a home in Monterey County paid for by the now-disgraced legal legend.

Laura Eimiller, a spokeswoman for the L.A. field office, said in a statement that Donald Alway “requested recusal and has not and will not be involved in this or any related FBI matter.”  Eimiller noted that Alway, who previously led the FBI’s office in Mississippi, began his current role on August 29, and that the Girardi investigation “largely predates his time in the Los Angeles Division.”

Court records show that Michelle Alway was Girardi’s secretary in the 1970s.  Records in Girardi’s second divorce show that through the mid-1990s, after she stopped working at the firm, she continued receiving hundreds of thousands of dollars from her former boss.  Girardi purchased the Carmel-by-the-Sea home in 1985, and it was meant to be a residence for Michelle Alway, according to court records.  The property was put in the name of another lawyer then at Girardi’s law firm, Richard Crane, according to a lawsuit Girardi later filed against Crane.  It is unclear why Girardi involved Crane in the property’s purchase.

Girardi paid more than $131,000 toward the mortgage of the home between 1993 and 1998, according to financial records compiled during the lengthy divorce proceedings.  Records in Monterey County show that Donald Alway currently co-owns the residence with his mother, and the property is valued at more than $1.2 million.  Online real estate companies estimate the home is worth close to $3 million.

In the period when Michelle Alway was receiving the money, Girardi had already started to misappropriate his clients’ settlement money for his own purposes, according to court filings by the trustee overseeing the law firm’s bankruptcy case.  Girardi’s mass misappropriation continued through 2020, when his law firm imploded and a federal judge in Chicago publicly referred Girardi for criminal investigation, kicking off the FBI’s inquiry.

The timing and duration of the relationship between Michelle Alway and Girardi is still to be determined.  The attorney has been married three times, most recently to The Real Housewives of Beverly Hills star Erika Girardi.  Kimberly Archie, a close friend of the Ruigomez family—who had millions of dollars of settlement money stolen from them by Girardi—and an advocate of other victims of Girardi, expressed frustration in the development.

“He only did it because he got called out,” Archie said.  “How many times are the victims going to get burned and feel like nobody’s on their side?  Who are we supposed to trust?”

Eimiller said the investigation into Girardi’s firm is led by the U.S. attorney’s office in L.A. and FBI Agent in Charge Brian Gilhooly.  Agent Amir Ehsaei, who oversees counterterrorism in the L.A. office, will serve in Alway’s place as assistant director in charge “for the purposes of this investigation,” Eimiller said.

The years-long investigation into Girardi and others affiliated with his law firm has come into further public view in recent weeks.  Earlier this month, the first public prosecution was disclosed when federal agents arrested former Girardi & Keese Chief Financial Officer Chris Kamon at an airport in Baltimore.  Kamon was charged with wire fraud, and in court, prosecutors described his alleged embezzlement of $10 million from the firm as a “side fraud” on a $100-million fraud scheme carried out by multiple people close to the law firm.