As more details emerge from the lawsuit filed by ticket broker Chuck Lombardo against Ticketmaster, the picture being painted is one of a company...

As more details emerge from the lawsuit filed by ticket broker Chuck Lombardo against Ticketmaster, the picture being painted is one of a company that has continually tried to quietly muscle its way into the secondary ticket market and allegedly manipulate ticket prices for certain artists. The lawsuit was first reported by TicketNews last week; click here to view a copy of the lawsuit.

While their names are not specifically on the lawsuit, former Ticketmaster President and CEO Sean Moriarty, and current CEO Irving Azoff, owner of Front Line Management, figure prominently in the case because Lombardo allegedly either negotiated directly with them or with other executives on their behalf.

In October 2007, a year before he signed an employment agreement with Ticketmaster, Lombardo and the company allegedly agreed that Lombardo and his employees “would advise, consult and assist Ticketmaster” with its secondary ticketing efforts on “an individual project-by-project basis in exchange for a flat fee and/or percentage per project.” The amount of the fee was not disclosed. Lombardo founded his company, Elite Entertainment Inc., in 1995, but he’s been involved in the secondary ticket business for more than 23 years.

Besides consulting, Lombardo and Elite sold tickets on the secondary market, on Ticketmaster’s behalf, for several high-profile tours as an exercise in how to price tickets. The tours included Van Halen, Def Leppard, Kanye West, Neil Diamond and New Kids on the Block, and the tickets were sold on TicketExchange, TicketsNow and TicketNews’s parent company TicketNetwork.

Following those transactions, Lombardo allegedly struck deals directly with Irving Azoff’s Front Line Management to buy tickets directly for The Eagles 2008-09 tour, which Elite sold on Front Line’s behalf, according to the lawsuit.

Ticketmaster is in the midst of trying to merge with concert giant Live Nation in the two say will create a combined colossus worth $2.5 billion, and which will have far-reaching influence on the ticketing and live entertainment industries. The proposed merger is being reviewed by the U.S. Justice Department, and throughout the process Azoff and Live Nation President and CEO Michael Rapino have railed against the secondary market but never disclosed what prior dealings they might have had with it.

The deal with Elite is just one of the clandestine moves Azoff and Ticketmaster tried to pull off in the secondary market. Over the summer, The Wall Street Journal exposed a plan hatched by Azoff, codenamed “Project Showtime,” where he and Ticketmaster executives met with and tried to acquire several ticket brokerages to boost Ticketmaster’s profile in the secondary market. Elite had been one of companies involved in Project Showtime, according to The Wall Street Journal.

Allegedly pleased with what Lombardo accomplished, Ticketmaster offered him a three-year contract and a $1 million signing bonus if he signed the employment agreement, and the company offered to cover all of Elite’s personnel costs. Ticketmaster then allegedly tried to force Lombardo to sign the agreement, before the two sides settled on the final terms of the acquisition of Elite, by threatening to have him “blackballed” from throughout the industry if he didn’t comply.

After he signed the agreement, Ticketmaster essentially froze out Lombardo, according to the lawsuit, by not negotiating with him or returning his calls. All the while, Ticketmaster had allegedly struck a deal with “Premiere Events a/k/a Gotickets.com,” to essentially operate Ticketmaster’s TicketmasterVIP.com site.

Following months of allegedly trying to get Ticketmaster to finalize the acquisition deal, Lombardo finally received an offer from the company in August that would allow him to basically list tickets for resale, but had no mention of an acquisition.

“In a nutshell, Ticketmaster used Plaintiffs’ knowledge and expertise contacts to build its secondary ticket platforms, inducing Plaintiffs to provide their services, knowledge, expertise, and contacts with false promises that Ticketmaster would acquire Elite and of full employment for Lombardo and Elite’s key employees with Ticketmaster. However, once Ticketmaster got what it needed and induced Plaintiffs, by means of false promises and economic duress, to sign the Settlement Agreement purporting to release any claims against Ticketmaster, and to accept less compensation than was owed for the services provided to Frontline and Ticketmaster, it ruthlessly cast Plaintiffs aside, without regard to the irreparable harm done to their business and to Lombardo’s ability to earn a living,” the lawsuit states.

Lombardo claims that while he knew he was potentially helping Ticketmaster “build a dominant competitor” against his own secondary ticket company, he did so with the understanding that “their consulting services would lead to lucrative full time employment with Ticketmaster” for him and his team.

In addition, Lombardo’s lawsuit also blows the lid off of some alleged business practices by TicketsNow, which he claims held up ticket orders and would not inform brokers with the tickets until the brokers were forced to lower their asking price. Then other brokers could buy the tickets at a discount and fill the order at a higher rate, which TicketsNow never disclosed to the broker who had the tickets.

Lombardo has declined to comment on the case, and Ticketmaster did not respond to a request for comment. The company told The Wall Street Journal that “This is a meritless lawsuit which we will defend with vigor.”