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Six-year corruption case settled

Seeking justice for fraud and corruption are not limited to criminal actions in California. These matters may be resolved through civil litigation in state courts.

Insomniac, which is a promoter of Rave, and its chief executive officer recently agreed to enter a settlement resolving a civil lawsuit filed by the Los Angeles Coliseum Commission in the Los Angeles Superior Court. It will pay $3.5 million to this agency.

The agreement ends a six-year case where two stadium managers were accused by the government of using corruption to enrich themselves while two Rave businesses were permitted to underpay the Coliseum. Insomniac and other business allegedly took part in unfair or unlawful business activities while underpaying the Coliseum by employing firms founded by a former events manager.

The Coliseum's general manager and its former events manager were accused of participating in a corruption scheme for 17 years. The general manager was accused of receiving $394.716 from a janitorial contractor. The events manager and his wife also allegedly diverted money that was owed to the government by the rave promoters, vendors and film promoters. Additionally, business firms founded by the manager allegedly received at least $1.8 million from vendors and film companies when he was employed by the Coliseum.

The Coliseum Commission's lawsuit against the events manager and his wife will be dismissed without prejudice. This permits the government to file another future lawsuit against him.

He pled no contest in 2016 to a felony conflict-of-interest case and was sentenced to six months imprisonment and ordered to pay $500,000 to the Coliseum Commission. He has paid $25,000 but his attorney said that his bank account was frozen and will pay off the restitution.

The general manager pled guilty to a felony conflict of interest count in 2012. He agreed to pay $385,000 to the Commission as part of that criminal case. He settled a civil lawsuit by paying another $30,000 in 2013.

One of the defendants in this lawsuit pled no contest to a misdemeanor conflict-of-interest charge. He agreed to pay $150,000 to Los Angeles County and was placed on probation for three years.

Businesses and individuals who were victimized by fraud or other unethical or illegal practices may be able to seek restitution for their losses. An attorney can help assure that proof is sought and a legal action is pursued.

Source: Los Angeles Times, "Years after suing Insomniac, L.A. Coliseum panel to get $3.5 million in corruption scandal settlement," By Rong-Gong Lin II, Oct. 3, 2017

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