The five defendants in the U.S. Cellular Coliseum case pleaded not guilty Friday to more than 100 counts of fraud, theft, and money laundering.
All five appeared in McLean County court for their arraignments. Just before they paraded in front of Judge Casey Costigan, prosecutors brought in a dolly carrying five stacked boxes of paperwork—part of the 2,000+ exhibits that underpin the case. Each box was handed off to the defense attorneys.
Facing charges are John Butler, who owned the Coliseum’s management and food-and-beverage companies; Jay Laesch, the former finance director for the food-and-beverage company; Kelly Klein, the arena’s former assistant general manager for finance; Paul Grazar, the former general manager of the food-and-beverage company, and Bart Rogers, the arena’s general manager.
During Friday’s arraignment, Costigan said he knew Butler personally and would be recusing himself from the rest of the case. All five cases were assigned to Judge Scott Drazewski.
Four of the five defendants had their own attorneys. Grazar asked for a public defender, which was appointed. Meanwhile, Butler’s request to travel out of state while out on bond was approved.
Their alleged schemes date as far back as 2007, soon after Butler’s company began managing the new city-owned arena. The 44 counts against Butler allege a multiyear scheme to skim off hundreds of thousands of dollars in concession fees that should have been paid to the City of Bloomington, according to the indictments. Some items were improperly discounted through the “Kelly Discount”—an apparent reference to Klein—costing the city additional money.
Those running BMI Concessions, the Coliseum’s in-house food and beverage provider, allegedly used their own pricing scheme to steal thousands of dollars in commissions due to the city. Instead, that money was retained as profit by BMI Concessions, prosecutors allege in their indictments.
Butler also faces money laundering and wire fraud charges. He’s also accused of filing fraudulent tax returns for allegedly understating the amount of taxable sales. Several of the indictments are Class X felonies, which carry a minimum sentence of six to 30 years in prison if convicted.
The charges capped a 16-month Illinois State Police investigation that began in May 2016 after a new management company, VenuWorks, took over the Coliseum in March 2016. Authorities say VenuWorks told city officials they discovered financial "discrepancies" related to the arena's previous manager, Butler's Central Illinois Arena Management (CIAM).
The five defendants are due back in court for a status hearing Nov. 3. They’re all out on bond.
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