Los Angeles County will pay the owner of Michigan-based election management software company $5 million to settle a lawsuit that alleged the LA County District Attorney’s Office violated his rights when he was arrested and charged in 2022 with a criminal case that was dropped 37 days later.
“Plaintiffs alleged Mr. Yu’s arrest and the seizure of Konnech’s property was without probable cause and a violation of Mr. Yu’s civil rights causing damage to Konnech’s business and Mr. Yu’s reputation,” county lawyers wrote to the Board of Supervisors in a letter urging approval of the settlement.
The Supervisors voted to approve the settlement Tuesday without any public discussion.
Attorneys for Konnech and its owner, Eugene Yu, said they were happy for their client, and said his business was devastated as a result of the public accusations.
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"The Los Angeles DA’s arrest of Mr. Yu based on utterly false charges -- charges the DA dropped 5 weeks later -- and the resulting publicity cost Mr. Yu his life savings and Konnech over 50 percent of its customers," said Yu's attorney, Dean Z. Pamphilis.
"Now, just four months after we sued on behalf of Mr. Yu and Konnech, Los Angeles County has agreed to settle the lawsuit, paying $5 million and agreeing to publicly proclaim Mr. Yu’s innocence," he said in an email to NBCLA.
"Mr. Yu is extremely pleased that his innocence has now been publicly confirmed, and he and Konnech look forward to start to recover from the significant losses which they suffered."
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The District Attorney’s Office said it would provide a response to the decision after the Supervisors voted, but one of the DA's prosecutors, Eric Neff, appeared at the Supervisors' meeting and spoke during a public comment session, urging the Board to reject the settlement.
"Lawyers who work for you and lawyers who's budget you approve are trying to get you to approve a payout of County funds that may be a waste of money," said Neff, who told the Board he was appearing in his personal capacity, not as a County employee.
He suggested the county had not fully investigated the circumstances of the alleged evidence against Yu and Konnech, and that it could have pursued other avenues to try to get the lawsuit dismissed without a payout.
"Have all the investigations into this matter been completed?," Neff asked. "If so, have you read them in their entirety, has County Counsel? Are you aware of their findings? And if all internal investigations have not been completed, why is this agreement being proposed to you now? Does it have to do with George Gascón's re-election campaign calendar?"
Yu was arrested on Oct. 4, 2022 as he left his home in Michigan.
LA District Attorney George Gascón announced at a news conference that Yu and his firm had criminally violated the terms of the company’s $2.6 million contract with LA County, under which the company provided election logistics software to voting officials.
Gascón accused Yu and the company of conspiracy and embezzlement, by allegedly storing some data about poll workers on servers in China, rather than on servers in the U.S., but specified that there was no evidence voting or voter data had been stored offshore.
"We intend to hold all those responsible for this breach accountable," Gascón told reporters.
The charges against Yu were dropped the next month.
Yu’s lawsuit filed in 2023 alleged the entire prosecution had been misguided and without evidence, and made claims in court papers that the gist of the case mirrored a variety of debunked election conspiracy theories that suggested the Chinese government had a hand in manipulating votes in U.S. elections.
Despite the arrest and public accusations, LA County remains Konnech’s largest customer, Yu said in legal filings, “which only confirms the outrageousness of Defendants’ misconduct and the necessity to hold them accountable.”
LA County spent approximately $673,372 in legal fees on the case, according to the settlement memo.
None of the Supervisors who voted to approve the settlement responded to requests for comment.
