A $3.5 million settlement was reached in a long- running lawsuit filed by the Los Angeles Memorial Coliseum Commission against a music festival promoter alleged to have been involved in a scheme to defraud the entity that oversees and manages the venue, a lawyer for the County Counsel’s office said Monday.
The commission and the nonprofit Los Angeles Memorial Coliseum Association filed suit against Insomniac Inc. and CEO Pasquale Rotella in Los Angeles Superior Court in November 2011, and the case had been scheduled to go to trial Oct. 10.
“The commission believes the settlement is in the best interests of the public and the commission,” Senior Assistant County Counsel Thomas Faughnan said.
The Coliseum Association’s functions include receiving income from food and beverage sales during events held at the Coliseum.
The plaintiffs agreed to dismiss the part of the case against former Coliseum events manager Todd DeStefano.
Insomniac attorney Gary Kaufman told Judge J. Stephen Czuleger during a brief hearing Monday morning that the settlement brings to an end a “very difficult and contentious matter.”
The suit alleged that from 2008-11, Insomniac made improper payments to DeStefano related to events the company produced at the Coliseum and adjacent properties.
“Plaintiffs claim such payments were part of a scheme to defraud the plaintiffs and divert money away from the plaintiffs,” the commission’s court papers stated.
The suit also alleged that the defendants made cash payments to individuals working on setting up and then tearing down equipment during Coliseum events, causing the commission and association to face liabilities for unpaid employment taxes and contributions to union trust funds.
The defendants denied any wrongdoing and said DeStefano performed valuable services for the commission and the association.
DeStefano pleaded no contest in April 2016 to a felony conflict-of- interest charge and was sentenced to six months in jail, ordered to pay $500,000 in restitution and three years probation.
Rotella pleaded no contest in August 2016 to misdemeanor conflict of interest and was sentenced to three years probation and ordered to make a $150,000 payment to the Los Angeles County Treasurer/Tax Collector.
–City News Service