Hotel queen faces jail, fines for tax evasion

Press, 1 September 1989, Page 8

Hotel queen faces jail, fines for tax evasion

NZPA-Reuter New York Leona Helmsley, the American ‘ hotel queen who said she thought only the little people paid taxes, found out yesterday she was wrong. A Federal jury convicted her of charges that ’ she evaded 5U51.2 million ($2.03 million) in taxes. She is now expected to forfeit millions of dollars in fines and possibly go to jail.

Mrs Helmsley, who with her husband, Harry, runs a SUSS billion ($8.47 billion) hotel and real estate empire in New York City, was found guilty of illegally deducting as business expenses such items as girdles, dresses, cosmetics and her 28-room mansion’s SUSI million ($1.69 million) swimming pool.

She was found innocent of extortion conspiracy

charges. Her lawyers, and lawyers for two former employees found guilty of aiding her in the tax evasion scheme, said they would appeal. The jury, who listened to nine weeks of testimony from former employees that often verged on character assassination, said her prickly personality had nothing to do with the verdict. Even her own lawyer described her as “a tough bitch.” The jury foreman, Alvin Taylor, said, “Personality had nothing to do with it. We just dealt with the facts. The evidence was there.”

Mrs Helmsley faces up to 124 years in jail on the tax evasion and tax fraud charges, but lawyers said realistically she would face a maximum of five years in prison.

The fines are expected to be in the millions. Besides paying them, Mrs Helmsley will also have to pay the Government the taxes she owed plus interest and penalties. Sentencing was tentatively set for November 14.

The prosecutor, Scott Greathead, said the state was prepared to try her on charges separate from the Federal case.

In a reference to Mrs Helmsley’s often quoted comment that “only the little people pay taxes,” Mr Greathead said her conviction was “a message that big people and little people alike owe a duty to pay their taxes.” The Helmsley holdings Include several Manhattan hotels as well as a share in the Empire State Building.