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Helmsley Hotel Owners Facing Tax Indictments

April 14, 1988|EILEEN V. QUIGLEY | Times Staff Writer

NEW YORK — Harry and Leona Helmsley, the billionaire baron and baroness of the New York hotel business, are expected to be indicted today on charges of income tax evasion, their lawyers said Wednesday.

"The allegations in the indictments expected to be announced on Thursday are completely groundless and grossly unfair to the Helmsleys, who have earned outstanding reputations for honesty and integrity in all their dealings," said a statement issued by a New York public relations firm on behalf of the Helmsleys' lawyers, Stephen E. Kaufman and Gerald A. Feffer.

"The Helmsleys have paid more taxes to the government over the years than practically any other individual in this city or country," the statement said. "In the last five years alone they have paid more than $250 million in taxes and given over $35 million in charity."

The couple were said to be returning to New York from Barbados to face the charges.

Harry Helmsley, 80, rose from his $12-a-week position as an office boy to become the largest private property owner in Manhattan. His holdings were estimated in 1981 to be between $3 billion and $5 billion. He reportedly owns at least seven Manhattan hotels with a total of 4,500 rooms, as well as real estate on Biscayne Bay, Fla., and in Chicago, Detroit, Houston and San Francisco.

He married realtor Leona Roberts when he was 63 years old. She became his business partner and president of their hotel business.

The indictments are expected to accuse the Helmsleys of allegedly diverting millions of dollars from their Helmsley hotel chain and offices to pay for renovation of their mansion, Dunellen Hall, in Greenwich, Conn., and then writing the expenses off as tax deductions, according to United Press International.

Also expected to be named in the indictments are Frank Turco, a former top aide to Leona Helmsley, and Joseph Licari, formerly chief financial officer of Helmsley Enterprises. They allegedly helped alter and bury the hotel funding transfers through complicated paper transactions, according to published reports.

"I hear that he is getting indicted. I've read it," said Licari's attorney, Lawrence S. Goldman of the New York law firm of Goldman & Hafetz. "If Mr. Licari is indicted, he will plead not guilty and expects ultimately to be totally vindicated."

Turco's lawyer, William Brodsky, did not return calls, but was quoted as saying that his client "has not knowingly engaged in any wrongdoing. He is confident that when all the facts are disclosed in court, he will be fully exonerated."

U.S. Attorney in Manhattan Rudolph W. Giuliani and New York Atty. Gen. Robert Abrams are expected to jointly announce the indictments, the result of a 14-month investigation in which they teamed up with Internal Revenue Service investigators to examine the Helmsleys' business and personal finances. Neither Giuliani's nor Abrams' offices would confirm the impending indictments.

Sources said that as many as 30 Helmsley employees were given immunity to testify before the state and federal grand juries.

They noted that Leona Helmsley was given immunity when she testified before two grand juries that she had bought a $375,000 diamond necklace and a $105,000 platinum and diamond clip at the Van Cleef & Arpels jewelry company and had it shipped out of state to avoid paying sales tax. At the time, only the storekeepers could be charged for the tax evasion scheme. Whatever she said during her testimony cannot be used to prosecute her in the current matter, sources told UPI.

The New York Daily News quoted a law enforcement source as saying that Leona Helmsley, 68, had turned down a plea bargain in which she would have pleaded guilty to business fraud to keep her failing husband from being indicted. Her lawyers declined to comment on the report Wednesday.

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