A felony indictment unsealed Friday accused former executives and concert promoters of a scheme to embezzle millions of dollars from the historic Los Angeles Memorial Coliseum as the once venerable site of Olympics, Super Bowls and political events was reduced to hosting rave concerts.
The 29-count, grand jury indictment released by Los Angeles County prosecutors alleges bribery, embezzlement, conspiracy and conflict of interest. It names two former Coliseum executives, two rave promoters and two other Coliseum contractors.
It claims that millions of dollars were stolen from the operations of the stadium that has been a landmark since the 1920s.
“My office has thoroughly investigated and will aggressively prosecute this public corruption case.” District Attorney Steve Cooley said.
Among the events cited by prosecutors while opposing bail for the defendants was a drug-fueled rave where a young woman suffered an overdose and later died. However, the event was not part of the grand jury indictment.
Prosecutors claim the promoters were undeterred by the death and pressed for more raves, providing bribes to win access to the venue.
Four defendants appeared in court and a judge entered pleas of not guilty for them. Their attorneys have said they are scapegoats for mismanagement of the Coliseum.
Superior Court Judge Patricia Schnegg agreed to significantly reduce the original bail figures set for the men. She ordered them back for a hearing March 28.
At day’s end, Todd DeStefano, assistant general manager for events, was being allowed to post $1.2 million bail as was Pasquale Rotella, the owner of Insomniac Inc. They were expected to be released.
Prosecutors said they had not yet presented their bail plans and would not be released immediately.
Two contractors named in the indictment were out of town and had not yet surrendered.
Lynch, DeStefano and Gerami were brought to court in blue jail uniforms with their hands cuffed.
Rotella, who was out of town when the others were arrested Thursday, flew to Los Angeles and surrendered in court. He was taken into custody.
Outside court, Rotella’s lawyer Gary Jay Kaufman said his client is a legitimate businessman who “built a company from a garage into selling out football stadiums.” He and other defense lawyers said their clients are innocent of any wrongdoing.
“We’re going to fight back,” said DeStefano’s lawyer, Michael Nasatir. “This guy is innocent. We’re going to show he’s innocent. They’re out of line.”
Rotella’s company staged the infamous Electric Daisy Carnival in 2010 at which a teenage girl took an overdose of Ecstasy and later died. The event led to cancelling other raves at the Coliseum.
“In the past, electronic music concerts, also known as raves, were generally conducted illegally, without permits and with rampant drug use,” prosecutors said in a motion opposing bail reduction. “More recently, their promoters have managed to bring the events to conventional venues but have faced resistance from the public due to continued drug use and other safety issues.”
The motion by Deputy District Attorney Max Huntsman said the promoters learned that “the best way to overcome such resistance is always to use an inside man.”
He said the inside man was DeStefano, who provided them with access to the Coliseum and adjoining property at low rates. The documents submitted to the court claimed that the Coliseum lost $2.5 million while DeStefano, Lynch, Gerami and Rotella made millions, with DeStefano receiving bribes.
In addition, the indictment alleged that Lynch had a side deal with the provider of maintenance services at the Coliseum for kickbacks of more than $385,000.
The charges marked a low point in the storied history of the venue where Rafer Johnson carried the Olympic torch in 1984 and John F. Kennedy accepted the Democratic presidential nomination in 1960.
The Coliseum opened in 1923 and was the site of Olympics in 1932 and 1984. The 1959 World Series and Super Bowls I and VII also were held there.
Known for its distinctive peristyle arches and Olympic torch, the Coliseum has been seen in movies, commercials and was the locale of a mass conducted by Pope John Paul II during a papal visit. It can seat 93,000 people for football games.
It sits in Exposition Park, which also features the aged Sports Arena, museums a science center, huge rose garden and other facilities and lawns.
It has fallen on hard financial times in recent years. The adjacent University of Southern California, which leases the property as an athletic games venue, is seeking to take over day to day operations of the city-owned property.
Rotella’s lawyer said his concert business will go on.
“The company has a robust leadership team in place implementing Mr. Rotella’s vision and no events will be impacted,” Kaufman said.
He said Insomniac has produced more than 250 music events for more than 2 million concertgoers in California, Nevada, Colorado, Texas, Florida, and Puerto Rico.
Insomniac’s premier annual event, Electric Daisy Carnival, is one of the biggest music festivals in the United States, he said.