LOS ANGELES (CN) - The Los Angeles Coliseum Commission sued two of its former administrators for $1 million, claiming they siphoned off hundreds of thousands of dollars at public expense. The commission claims that lead defendant Pat Lynch II received payments in accounts under his name for event services that should have gone to the Coliseum.
The commission and the Los Angeles Memorial Coliseum Association claim that Lynch and co-defendant Todd DeStefano diverted money from events to line their own pockets, including dance festivals staged by co-defendants Insomnia Inc. and Go Ventures.
The commission claims that Lynch and DeStefano misled the nine-person governing body of the public entity for years. It accuses Lynch of acting as if the commission and association, which provides food and beverage services at Coliseum events, were "small private businesses he personally owned."
"For years, Lynch profited personally by abusing his position of trust and responsibility receiving more than his substantial, lawful wages and benefits from the commission," the complaint states. It claims that the commission learned "in early 2011 that from August 10, 2006 through January 20, 2011, Lynch unlawfully received at least $394,716.00 in funds diverted from payments that otherwise would have been received by the commission."
It continues: "In regular, consistent deposits by Tony Estrada, an individual, to one or more bank accounts in Lynch's name, including an account opened at a bank in Miami, Florida, on or about February 1, 2007, Lynch received payments from Tony Estrada and Estrada's firm, Services for All Events ('SFAE'), which provided hourly workers for cleaning, event setup and event changeover at the Los Angeles Memorial Coliseum and Sports Arena. The payments to Lynch represented approximately $1.00 to $1.25 for every hour of labor billed by SFAE to the plaintiffs."
Neither Estrada nor SFAE are parties to the complaint, whose defendants include Todd DeStefano's wife Carisse, his companies LAC Events Inc., Private Event Management Inc. and Private Event Showcase LLC.
The commission claims that Lynch "failed to act with regard for the public trust" and that "his conduct led others under his management to disregard their obligations of public trust and to profit for themselves at the expense of the plaintiffs."
The lawsuit states: "For years, DeStefano, individually, and in recent times with his spouse, Carisse DeStefano, profited personally, and improperly derived funds for themselves and the other DeStefano defendants or companies, by diverting revenue that could and should have been paid by defendants to the plaintiffs, including money from concessionaires and vendors, and from various promotions, electronic music festivals, film productions and other events. These defendants manipulated contractual terms and accountings of events, thereby diverting material revenue from the services provided by plaintiffs, and kept it for themselves.
"Since 1998, the Coliseum and Sports Arena have hosted 37 electronic music festivals with more than 1 million attendees. ... At times during these growth years, DeStefano approved contractual arrangements in which he and/or his spouse had a financial interest in defendants Insomniac, Go Ventures and Doe defendants, with the knowledge of these defendants. Said defendants also knew the DeStefano was an employee and public servant of the plaintiffs."
The commission seeks an accounting and damages for violations of the False Claims Act, breach of fiduciary duty, intentional and constructive fraud, unjust enrichment, civil conspiracy to defraud, violations of Government Code section 1090, unfair business practices, breach of implied covenant of good faith and fair dealing, and negligence.
It is represented by Charles Slyngstad, with Burke, Williams & Sorensen.
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