New Charges In Coliseum Suit

Lawyers for the Los Angeles Memorial Coliseum will amend a lawsuit filed against two of the venue’s former managers in light of new evidence of secret cash payments allegedly made to union representatives.

The nonprofit commission that oversees the state-owned Coliseum filed suit in November claiming former GM Pat Lynch and former events manager Todd DeStefano diverted revenue from the venue through side deals with companies.

The suit also accused the pair of breach of fiduciary duty and fraud and sought to recover more than $1 million in lost funds.

The commission said in a statement that an ongoing investigation uncovered “substantial, improper cash payments had been made by certain Commission employees on behalf of certain promoters, or directly by the promoters, to a union representative on the dates of their events at the Coliseum and Sports Arena.”

As the payments were apparently known to Lynch and DeStefano and considered wages for stagehands, the investigation is now focused on the “total amount of such payments, who personally benefited from the payments, and whether appropriate taxes and pension payments had been withheld and paid to the proper authorities.”

Documents obtained by the Los Angeles Times detailed advances of $82,000 and $54,600, respectively, to the International Alliance of Theatrical Stage Employees for two concerts in 2010, along with earlier advances of up to $71,200.

Commissioner Bernard Parks told the paper the venue’s operations had become a “cesspool” and that money was often taken from the box office or a stadium account and delivered to a union agent in suitcases, meaning “there were no controls” by the Coliseum over the distribution of the funds.

Lynch, DeStefano and several other concert companies that were named in the commission’s suit have denied any wrongdoing. However, investigations found that Lynch received roughly $400,000 in a Miami bank account from a janitorial contractor for the Coliseum and DeStefano was found to have earned at least $1.8 million through side deals with other companies that did business with the commission.

The commission noted that the IRS, State Franchise Tax Board, District Attorney and City Controller have all been alerted of the new evidence.

Additionally, the group has started to include a reserve allocation in its financial statements to cover back taxes and other expenses, if needed, and seeks to recover such costs through the lawsuit, the statement said.