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Leona Helmsley, 87; imperious New York hotelier served time in prison for income tax evasion

August 21, 2007|Dennis McLellan | Times Staff Writer

Leona Helmsley, the imperious Manhattan hotel magnate who was derided as "the Queen of Mean" in the late 1980s when she was on trial for income tax evasion and was deemed the woman New Yorkers most loved to hate, died Monday at her summer home in Greenwich, Conn. She was 87.

Helmsley, whose $2.5-billion personal fortune last year had her tied as No. 117 on the Forbes list of 400 richest Americans, died of heart failure, said her publicist, Howard Rubenstein.

Although she denied having said it, Helmsley may be best remembered for a comment attributed to her by a housekeeper: "We don't pay taxes; the little people pay taxes."

"Leona Helmsley was definitely one of a kind," real estate mogul Donald Trump told the Associated Press on Monday. Her late husband, Harry, he said, "loved being with her and the excitement she brought, and that is all that really matters."

A former model who became a successful New York real estate broker and executive, Helmsley was a senior vice president of Helmsley-Spear Inc., the largest of real estate magnate Harry Helmsley's real estate sales organizations, when she married him in 1972.

Eight years later, Harry, who remained as chairman, made Leona president of his hotel empire that included more than two dozen hotels, several of which were luxury establishments in New York City.

Leona Helmsley quickly gained public notice in a high-profile advertising campaign that centered on the showcase Helmsley Palace in New York City -- over which she presided as its self-proclaimed "queen."

One ad, featuring her in a glamorous designer gown and tiara, proclaimed the hotel to be "The only palace in the world where the queen stands guard."

She bragged about her attention to detail in a 1985 interview with Savvy magazine.

"I know if a bulb is out in Room 14 of the Harley [hotel] before the manager does," she said. "I know if there's a torn pillowcase at a suite in the Palace. I read every card guests filled out from every one of the hotels, especially the negative ones. And I answer them personally."

The high-flying Helmsleys' personal empire in 1988 included a 28-room, 26-acre estate in Greenwich, which boasted a walk-in silver vault. They also had a penthouse duplex apartment in the Park Lane Hotel in New York, which featured a living room on each floor, a greenhouse and a pool. And they flew to their penthouse in Palm Beach in their private, 100-seat jet.

The couple, who had a reported personal worth of $1.4 billion at the time, threw extravagant parties and were seen dancing with the glitterati at charity balls several times a week.

But the society couple suddenly found themselves the subjects of far less flattering news coverage.

In April 1988, "the billionaire baron and baroness of the hotel industry" -- as a story in the Los Angeles Times called them -- stood accused in federal and state indictments of evading $4 million in income taxes between June 1983 and April 1986.

A year later -- in August 1989 -- Leona Helmsley, then 69, was found guilty of 33 felony counts, including tax evasion, filing false tax returns and mail fraud. Helmsley was convicted of evading $1.2 million in federal income taxes by charging personal expenses to Helmsley-controlled companies.

Harry Helmsley was found incompetent to stand trial because of his failing memory.

Much of the two-month trial, according to an account in The Times, focused on references to the couple's luxurious lifestyle and Leona Helmsley's imperious personality.

Indeed, Helmsley's own attorney described her in his opening argument as "abrasive," "demanding" and "a tough bitch."

Witnesses testified that she fired servants in fits of temper -- one because he had dirty fingernails and another because his hand trembled when he served her. And a chef was fired for the way he arranged the food on a plate.

When she heard that an unpaid contractor who had installed a custom-made barbecue pit at the Helmsley estate for $13,000 complained that he needed to be paid because he had six children to feed, she was said to have responded, "Why doesn't he keep his pants on? He wouldn't have so many problems."

Witnesses also testified that she charged underwear, a leg waxing and jade artwork to the Helmsley companies, and that she told an executive who refused to approve false invoices: "You [expletive], you're not my partner. You don't tell me how to spend my money. You sign what you're told to sign."

In 1992, after being free on $25-million bail, Helmsley began serving a four-year sentence for income tax fraud at a medium-security prison in Lexington, Ky.

"I'll do what I have to do to get back to Harry and to get on with my life," said Helmsley, who served less than two years and reportedly paid about $8 million in fines and restitution.

Like her Bronx-born husband, Helmsley came from humble beginnings.

The daughter of a milliner, Leona Mindy Rosenthal was born July 4, 1920, and grew up in the Flatbush section of Brooklyn.

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