Helmsley Tax Evasion Scheme Alleged in Court

Billionaire hotelier Leona Helmsley evaded more than $1 million in taxes by charging personal expenses to her businesses because she was cheap and arrogant, a federal prosecutor said Wednesday.

“If there’s one thing you learned at this trial, it’s that just because you’re rich doesn’t mean you’re not cheap,” Assistant U.S. Atty. Cathy Seibel told the jury in her closing argument. “The Helmsleys kept an eagle eye on every penny.”

She said Mrs. Helmsley was not above “nickel and diming” her employees, so it should come as no surprise that she would become involved in a phony billing scheme to charge personal expenses to her businesses.

But Mrs. Helmsley’s lawyer, Gerald Feffer, said Mrs. Helmsley had nothing to do with the phony bills. He said her employees devised the scheme to avoid contact with her and they made false invoices to bill the expenses to Helmsley businesses so the contractors at her $11-million Connecticut estate could be paid without her knowledge.

“There’s no question that Mrs. Helmsley was a very tough person to deal with,” Feffer said. He argued vehemently that Mrs. Helmsley was never involved in a conspiracy to defraud the Internal Revenue Service.

As Feffer spoke, Mrs. Helmsley watched him intently and sometimes vigorously nodded her head in agreement.

“You can call Mrs. Helmsley cheap, but in the three years in question, the Helmsleys paid $59 million in taxes.” he said.