Rave Promoters Reza Gerami, Pasquale Rotella Plead Not Guilty in Coliseum Corruption Case
Updated at the bottom with indictment details from the District Attorney's office. First posted at 12:22 p.m. Also, see our piece about how the D.A.'s office seems to be implicating rave culture itself, here.
Defendants in the corruption scandal at the L.A. Coliseum today pleaded not guilty today.
Indictments, the details of which had yet to be revealed to the press, targeted rave promoters Reza Gerami and Pasquale Rotella as well as the public venue's former general manager, Patrick Lynch, and events manager, Todd DeStefano.
Both rave promoters have maintained their innocence in statements:
Gerami's attorney, Stefan Sacks, said:
Throughout the course of its dealings with the Coliseum Commission, Go Ventures followed all of the rules and procedures that it understood were either established or authorized by the Coliseum Commission. Neither Go Ventures, nor Mr. Gerami, ever knowingly violated any public corruption laws, nor have they sought to abuse the public trust. We are confident that the evidence will show that our client, Mr. Gerami, was not a perpetrator in any wrong doing and that he will be completely exonerated in court
Rotella's attorney, Gary Jay Kaufman said in a statement sent to the media today:
Rotella heads to court today with his attorney.
Insomniac Events / Leah Lee
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.
Any charges against Mr. Rotella are clearly politically motivated and publicity driven. Mr. Rotella will vigorously defend himself to clear his good name and looks forward to being completely vindicated.
In the meantime, it is business as usual for [Rotella's concert firm] Insomniac. The company has a robust leadership team in place implementing Mr. Rotella's vision and no events will be impacted.
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The Los Angeles Times reported that DeStefano was paid more than $2 million from event organizers, including the above rave promoters, on the side, even though the Coliseum is a publicly owned venue.
And, in a story we broke, event organizers also allegedly paid Coliseum union stagehands $2.5 million in cash for their work at parties and concerts, therefore possibly avoiding hundreds of thousands in taxes and other necessary deductions.
Rotella was in Miami this week to attend the annual DJs' retreat known as the Winter Music Conference but apparently returned to L.A. overnight and surrendered to authorities.
All four defendants were arrested and jailed, and bail for the rave promoters was set at $1.2 million.
[Update at 12:38 p.m.]: The District Attorney's office just sent out a statement saying the defendants, including two others previously unknown to us, were hit with "conspiracy, embezzlement and bribery charges for allegedly stealing millions from the historic stadium."
A grand jury came up with 29 counts and turned them into the D.A. on Tuesday, according to the office.
The two additional defendants are former Coliseum technical manager Leopold Caudillo Jr. and janitorial contractor Antonio "Tony" Estrada, according to the D.A. Those two had yet to be arrested and were said to be "out of the country."
The crux of the D.A.'s case against the rave promoters and DeStefano is summarized by this allegation, made in the office's statement:
DeStefano, who quit in January 2011, allegedly received more than $1.8 million from Insomniac, the company that produced the Electric Daisy Carnival, and Go Ventures, which also sponsored Coliseum events. In exchange, DeStefano used his public position to limit the payments due the Coliseum and ensure the concerts continued even after a highly publicized fatality after one of the concerts in the summer of 2010.
Gerami and Rotella "are charged with one count each of conspiracy and bribery and multiple counts of embezzlement," according to the statement.
[Added at 12:45 p.m.]: The case against Lynch is summarized by the office here:
The indictment alleges Lynch did profit from his own arrangement with Tony Estrada, the owner of "Services for All Events," a janitorial company that cleaned the stadium. Estrada allegedly wrote 239 checks to Lynch totaling $385,000, giving some to Lynch and depositing others directly into a Miami bank account that Lynch set up. In return, Lynch allegedly authorized Estrada's company to bill the Coliseum at a higher rate.
Caudillo, the D.A.'s office says, "was charged with one count of conflict-of-interest after he allegedly directed stadium business to a firm he founded, HH Tech."
Regarding the rave promoters' relationship with DeStefano and Lynch, a petition to freeze assets filed with the court states:
Defendants Gerami and Rotella paid DeStefano in excess of $1.8 million in order to continue to hold the events they promoted at the Coliseum through contracts that DeStefano negotiated to the benefit of the promoters, thereby saving them significant sums of money, and to the detriment of the Coliseum which lost revenue by the reduced costs as well as the payments diverted to DeStefano's personal business accounts. Rotella and Gerami paid DeStefano to directly lobby for them to save them at least $1 million by virtue of his position as a Coliseum insider who affected the contract for their events and the amount of rent paid to the Coliseum. Lynch became aware of the relationship and allowed it to continue.
The petition lists assets owned by the defendants and argues that the suspects might try to "dissipate" them in order to avoid paying restitution.
The D.A. is asking the court to essentially freeze those assets. For Rotella the amount they seek to be frozen is about $1.7 million assets. For Gerami it's about $372,000.
[Added at 1 p.m.]: A District Attorney's response to the defendants' arguments for lower bail amounts seems to empty both barrels at DeStefano, Gerami and Rotella. It attempts to paint Gerami and Rotella as part of a longstanding illicit rave culture that found quasi-legitimacy in DeStefano's influence at the publicly run venue:
Ravers at Gerami's 'Love Festival.'
In the past, electronic music concerts, also known as raves, were generally conducted illegally, without permits and with rampant drug use. 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 best way to overcome such resistance is always the use of an inside man. In 2008, DeStefano, Gerami and Pasquale Rotella agreed that the two promoters would pay DeStefano personally and in exchange he would use his official position to provide them access to the Coliseum and low rates.
The document says that the rave promoters claim that they paid DeStefano nearly $1.9 million for services and events that did not happen on Coliseum property. But the D.A. says that Pasquale told a Coliseum employee that the money was, in fact, related to his events at the venue.
The D.A.'s office claims in the bail statement that the rave promoters, in exchange for the payments, got "a tireless advocate" in DeStefano, who facilitated their ...
... continued use of the Coliseum even after the fatality in the summer of 2010, and a mole who provided them inside information such as which [Coliseum] commissioners were for them or against them, which commissioners to support financially with political contributions and other financial assistance, and even attorney work product prior to its public release.
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