LOS ANGELES — Los Angeles County agreed Tuesday to pay $5 million to the founder and CEO of a software company briefly accused of stealing data on county poll workers in a case he said was pushed by conspiracy theorists.
The Board of Supervisors voted without public discussion to approve the settlement of a lawsuit filed by Eugene Yu of Michigan-based Konnech Corp. about his arrest and prosecution in 2022, KNBC-TV reported.
Attorneys for the county had urged approval of the settlement in a letter to the board, the station said.
Konnech is a small company based in East Lansing, Michigan. In 2020, it won a five-year, $2.9 million contract with LA County for software to track election worker schedules, training, payroll and communications.
Yu was arrested in Michigan in October 2022 and computer hard drives were seized. The LA County District Attorney’s Office alleged that Konnech violated the contract’s requirement to maintain data in the United States and improperly used servers in China to store information on hundreds of county poll workers.
Yu and his company were charged with conspiracy to embezzle public funds and grand theft by embezzlement of public funds. The case was dismissed 37 days later.
Yu sued the county, claiming that District Attorney George Gascón targeted him based on accusations from conspiracy theorists and election deniers.
“Plaintiffs alleged that Mr. Yu’s arrest and seizure of Konnech’s property occurred without probable cause and violated Mr. Yu’s civil rights, causing harm to Konnech’s business and Mr. Yu’s reputation “, according to the letter from the province’s lawyers.
An after-hours email from The Associated Press to the Attorney General’s Office seeking comment was not immediately returned.
Yu’s attorney, Dean Z. Pamphilis, told KNBC-TV that “completely false allegations” and the resulting publicity “have cost Mr. Yu his life savings and Konnech more than 50% of his clients.”
“Mr. Yu is extremely pleased that his innocence has now been publicly confirmed, and he and Konnech look forward to beginning to recover from the significant losses they have suffered,” the lawyer said.
The lawsuit alleged that the prosecution of the company and Chinese-born Yu was based on debunked conspiracy theories that the company was secretly linked to the Chinese Communist Party and provided information as part of a Chinese campaign to manipulate votes.
At one point, Yu received threats and went into hiding, The New York Times reported.
After his arrest, which came about a month before the November 2022 general election, the LA Attorney General’s Office said the charges only involved poll watchers, not voting machines or vote counts, and did not change election results.
However, the office told NPR after Yu’s arrest that the investigation began after a tip from Gregg Phillips, an election denier with ties to the controversial group True the Vote.
In legal documents for the lawsuit, Yu noted that Los Angeles County continues to use Konnech’s services and is in fact its largest customer.
On its website, Konnech said it currently has 32 customers in North America.