D.A.'s Office Lays Out Case Against L.A. Coliseum Six
Charges Include bribery, corruption and conflict of interest
- by Dave Brooks
- Published: March 26, 2012
Insomniac Events CEO Pasquale Rotella (right) turns himself in to authorities Friday. He is seen here with his attorney Gary Jay Kaufman (Photo Credit: Insomniac Events)
Former Los Angeles Memorial Coliseum GM Pat Lynch spent the weekend locked up in an L.A. County jail. He is one of six charged in a 29-count public corruption scandal alleging embezzlement, bribery and kickbacks at the iconic stadium.
Los Angeles County District Attorney spokesperson Sandi Gibbons said Lynch had not yet posted bail since his arrest Friday. Co-defendant Reza Gerami, an electronic dance promoter and owner of Go Ventures, was also still in custody. Bail was set at $800,000 for Lynch and $1.2 million for Gerami.
Also arrested and charged were the Coliseum’s former Assistant General Manager Todd DeStefano and Electric Daisy Carnival Promoter Pasquale Rotella. According to Gibbons, both men were able to post bail and are currently free on a $1.2 million bond each.
The District Attorney’s office has released a 29-count indictment against the men, including allegations that DeStefano accepted kickbacks worth $1,175,000 from Rotella and $716,680 from Gerami to host events at the stadium, and allegedly accepted another $240,000 from other groups through his company LAC Events.
Rotella's attorney Gary Jay Kauffman released a statement saying, "All transactions between Insomniac and the Coliseum were transparent and approved by the Coliseum General Manager, his staff and the attorneys representing the Coliseum. While we recognize that issues surrounding the Coliseum demand attention, we are extremely disappointed that the District Attorney would seek to have Mr. Rotella arrested when he did nothing wrong."
DeStefano's attorney Richard Hirsch was equally defiant, arguing that "Todd (DeStefano) sought and received authorization from his supervisor at the Coliseum Commission" to make private deals with promoters.
If convicted, DeStefano faces a maximum sentence of 25 years in prison in the case, Gibbons said. Lynch and Gerami would face maximum sentences of 15 years, eight months in prison and Rotella faces a maximum sentence of 13 years and eight months.
Also charged in the case are Tony Estrada, the Coliseum’s former janitorial contractor, along with Coliseum Technology Manager Leopold Caudillo Jr. Both men’s whereabouts are unknown and Gibbons indicated they might be out of the country.
The indictment paints a picture of alleged corruption and bribery at the 91-year-old stadium, host to two presidential addresses, the 1984 Olympics and a mass in front of 100,000 by Pope John Paul II in 1987.
The D.A. investigation spans back to June 1, 2006, and accuses DeStefano of skimming 10 percent of all ticket sales for rave events in secret agreements with Rotella and Gerami. The D.A.’s office said DeStefano also pressured the promoters to make political donations to board members at the Coliseum, including a request for $10,000 worth of fireworks for commissioner and L.A. City Councilman Bernard Parks Jr., whose district includes the stadium.
The indictment centers mostly around three events in 2010 — Monster Massive and Love Fest promoted by Go Ventures, and Electric Daisy Carnival promoted by Insomniac. The indictment alleges that DeStefano took kickbacks to get the events approved, skimmed money from ticket sales and also alleges that DeStefano even worked for Rotella while also working for the stadium; a crime the D.A.’s office is treating as felony embezzlement.
DeStefano's attorney argued in a statement that "income Todd received was not from revenues to which the Coliseum Commission was entitled. There was no monetary loss to the public or the Commission."
The indictment alleges that DeStefano would appear before the Coliseum’s Board of Directors and lobby for events like Electric Daisy Carnival, not disclosing that he was being paid by the company that put the rave on. After a girl died at the 2010 Electric Daisy Carnival, he lobbied the commission to drop an outright ban on raves at the building.
Hirsch argued that the commission was run more like a private company and "not like a government agency, as the District Attorney now claims." No taxpayer funds are used to support the running of either the L.A. Sports Arena or Coliseum.
According to the indictment, DeStefano would charge promoters only $25,000 in rent to run massive events at the Coliseum and adjacent Sports Arena, and then receive additional cash payments from the promoters to his private company. DeStefano, Gerami and Rotella are also charged with bribery.
Prosecutors also argue that DeStefano allegedly kept money earned from renting the building to companies like Dreamworks, who paid DeStefano’s company, LAC Events, $74,000 to film scenes for the film “Blades of Glory” at the arena. DeStefano allegedly kept the money. He allegedly kept half of a $100,000 deposit to film "American Gladiators" at the arena, and allegedly pocketed $120,000 from drink deals with Coca-Cola and Southern Wine and Spirits.
Lynch was also charged in a kickback scheme with Estrada, the Coliseum’s former janitorial contractor. According to the indictment, in 2006, Lynch ordered Coliseum Financial Director Ron Lederkremer to increase the hourly rate paid to Estrada for janitorial services. Estrada then allegedly paid Lynch $376,553 over four years. Eventually Lynch set up a bank account in Miami, the indictment alleges, and Estrada reportedly made deposits directly to the account.
The arrangement was eventually discovered by an auditor at the Coliseum and, when asked, “Lynch denied the arrangement and said the account was a joint one with Estrada that Estrada claimed was created to pay a worker’s compensation claim,” the indictment read, saying that Lynch did admit that Estrada had once proposed a kickback scheme.
All four men are due back in court Wednesday at 10:30 a.m.
Contact: Sandi Gibbons, (213) 974-3525; Gary Jay Kaufman, (310) 351-1825; Richard Hirsch, (310) 399-3259
- by Dave Brooks
- Published: March 26, 2012