In March, the District Attorney's Office wrapped up its five-year prosecution of figures implicated in the Coliseum Corruption scandal, and rave promoters — who were accused of essentially bribing a public official for access to the taxpayer-owned facility — walked away relatively unscathed.
The commission, a body of political appointees and rotating elected officials, isn't giving up. This week, it filed a suit against just one promoter: Pasquale Rotella and his Insomniac Entertainment firm. It alleges that corporate reorganization was undertaken in order to “hinder, delay or defraud” possible future creditors such as the Coliseum Commission.
The filing says a previous civil claim is still outstanding, and that the reshuffling could have allowed Rotella to use $2 million in funds from a new entity, Insomniac Holdings, to pay up. In 2013 the world's largest concert promoter, Live Nation, purchased a minority stake in Insomniac for $44,697,000 plus “miscellaneous other consideration,” according to the suit.
“Insomniac Inc. had fraudulent intent to escape from financial responsibility” connected to the alleged fraud, the suit states.
The suit says net proceeds from Insomniac parties at the Coliseum between 2007 and 2011 amounted to $24.7 million — $8 million of which was profit. It says the commission is the holder of a current claim to recover between $8 million and $24.7 million.
The filing, recorded in Superior Court Monday, doesn't mention a new amount. It simply asks for “costs of suits incurred” and possible “further relief.” Coliseum chief administrative officer Robert E. Osborne had no comment.
Gary Jay Kaufman, attorney for Rotella, said via email, “The Coliseum feigns surprise at transparent, above-board transactions that they have known about for over four years. Suffice it to say, this newest baseless lawsuit will be vigorously defended.”
The scandal erupted in 2011 when it was discovered that Rotella and competing rave promoter Reza Gerami of Go Ventures paid an estimated $1.8 million under the table to Coliseum events manager Todd DeStefano, who was sentenced to six months behind bars for his role.
Rotella, who moved his signature Electric Daisy Carnival festival to Vegas in 2011, got three years of probation and a $150,000 restitution bill. Gerami, who also abandoned the venue, essentially putting an end to raves there, got three years of probation and a $30,000 fine. In August, both pleaded no contest to misdemeanor conflict of interest.
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