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Donald Sterling to pay $2.725 million to settle housing discrimination lawsuit [Updated]

November 3, 2009 |  9:54 am

Clippers owner Donald T. Sterling applauds with seconds remaining as his team comes from behind to beat the Sacramento Kings last week at Staples Center.

Los Angeles Clippers owner and real estate mogul Donald T. Sterling has agreed to pay a record $2.725 million to settle allegations that he discriminated against African Americans, Hispanics and families with children at scores of apartment buildings he owns in and around Los Angeles.

The settlement, which must be approved by U.S. District Judge Dale S. Fischer, is the largest ever obtained by the Justice Department in a housing discrimination case involving apartment rentals, officials said.

If approved, the settlement would also resolve a pair of lawsuits by former tenants of Sterling who alleged they were discriminated against because of their race.

[Updated at 1:10 p.m.: In the court documents describing the agreement, Sterling and his wife, Rochelle, deny any wrongdoing. They describe the agreement as "a compromise of disputed claims" and not an admission of any liability.]

Under the agreement, Sterling and his wife would pay $2.625 million to a fund for people who were harmed by their discriminatory practices, officials said. They would also pay a $100,000 penalty to the government.

“The magnitude of this settlement demonstrates our commitment to vigorously prosecute violations of the Fair Housing Act,” Thomas E. Perez, head of the Justice Department’s Civil Rights Division, said in a statement. “With tight mortgage credit and rising foreclosures, it is more important than ever that minorities not face discrimination when renting apartments.”

The Justice Department sued the Sterlings three years ago, accusing them of favoring Korean tenants while seeking to exclude blacks and families with children. Through their Beverly Hills Properties, the Sterlings own and manage about 119 apartment buildings with some 5,000 units in Los Angeles County, according to the Justice Department.

In court filings, Justice Department lawyers presented evidence that the Sterlings made statements “indicating that African Americans and Hispanics were not desirable tenants and that they preferred Korean tenants” occupy buildings they owned in Koreatown.

Had the case gone to trial, an expert would have testified that an analysis of the Sterlings' rental practices in Koreatown revealed that they rented to far fewer African Americans and Hispanics than would be expected, based on demographics. As part of the settlement, the Sterlings will be required to pay for an independent contractor to monitor their employees' compliance with the Fair Housing Act over the next three years. The results of the tests would be reported to the Sterlings and to the government.

-- Scott Glover

Photo: Clippers owner Donald T. Sterling at a game. Credit: Alex Gallardo / Los Angeles Times