Leona Helmsley Gets 4 Years and $7-Million Fine

Leona Helmsley, the self-proclaimed queen of a luxury hotel chain, was sentenced Tuesday to four years in federal prison and fined $7.1 million by a judge who said her criminal tax offenses were the product of “naked greed.”

The judge imposed the sentence after Helmsley, 69, tearfully begged for mercy.

U.S. District Judge John M. Walker Jr. told Helmsley that she had “an arrogant belief that she was above the law.” He noted that her crime wasn’t motivated by financial need and said that, since her conviction, she had shown no remorse.

Helmsley and two employees were convicted in August on 33 felony counts related to evasion of $1.2 million in federal income taxes, including Helmsley’s diversion of funds from the real estate and hotel companies that she and her husband controlled in order to pay for lavish personal expenditures.

Helmsley’s trial drew intense media interest. She became a symbol of upper-class abuse of privilege when a former housekeeper testified that Mrs. Helmsley had once snapped at her: “We don’t pay taxes; the little people pay taxes.”

In addition, Walker sentenced Helmsley to three years of probation, including 750 hours of community service at Hale House, a home for infants born addicted to drugs. The judge ordered her to pay the federal taxes she owes, plus penalties and interest, and $469,000 in New York state taxes.

The judge allowed her to remain free on bail pending an appeal, with the amount of bail to be determined later. Should her appeals fail and she be sent to prison, she would be eligible for parole after serving a year and three months.

As she and her husband, Harry, 80, left the courthouse Tuesday, members of a crowd that had gathered outside shouted “Whore!” “The queen is dead!” and “Bitch, you should have got a thousand years!”

Attracted by what promised to be one of the great courtroom scenes of the year, scores of would-be spectators had stood in line for over an hour to get inside. Mrs. Helmsley, renowned from magazine ads in which she appeared as the perfectionist queen of the Helmsley Hotels chain, attended court in a long-sleeved black mock turtleneck dress with a drop waist and loose pleats.

When the judge asked her if she had anything to say, she stood but had trouble getting her words out because of sobs. She said: “I’m more humiliated and shamed than anybody could ever imagine that I have been found guilty of a serious crime.”

Helmsley said that, because of the case’s extensive publicity, she and her husband had been virtual prisoners in their home for three years, unable to leave because they might be attacked or jeered. She said her life was “a nightmare.”

She referred to her continuing grief for her son, who died in 1982, and then spoke of Harry, who has been judged mentally incompetent and whom she has been taking care of.

“I beg you, please don’t let me lose Harry too,” Helmsley said. “Our whole life has been work and each other. We have nothing else.”

She ended her statement by saying: “I’m sorry. I’m sorry.”

Harry Helmsley, the founder of a New York real estate and hotel empire estimated to be worth $5 billion, had been indicted along with his wife. But he was later judged unfit to stand trial because of failing memory and didn’t appear at all in court during the trial.

Harry Helmsley attended Tuesday’s sentencing flanked by three bodyguards. He appeared thoughtful and attentive. But afterward he showed no sign of having fully understood the proceedings. When a friend offered support and told him soothingly that his wife was unlikely to begin her sentence “for years and years,” until the appeals process is exhausted, Helmsley laughed and repeated “years and years.”

After the sentencing, Mrs. Helmsley turned to friends in the courtroom, including television personality Barbara Walters, and said: “See what they’ve done to me?”

Helmsley’s attorney, Gerald Feffer, acknowledged that she deserved to be punished for her crimes. But he noted in court that his client will soon turn 70 and said she has already been severely punished by the humiliation and abuse she has suffered at the hands of the press and public.

Feffer said Helmsley had received death threats, as well as voluminous hate mail, much of it obscene and anti-Semitic. He said her position and notoriety mean that she would be a target of physical abuse in prison.

Feffer had asked the judge to sentence her to perform community service at Hale House. Feffer told the judge that, if he felt that punishment wasn’t severe enough, he could also sentence Helmsley to live in Harlem, in one of Hale House’s residential facilities for mothers recovering from addiction. This, Feffer said, would place her in “an environment that will humble her on a daily basis.”

When he pronounced sentence, Judge Walker said that in making up his mind he had focused only on her crimes, ignoring Helmsley’s “vilification” in the press, as well as testimony that she was sometimes cold-hearted and vindictive in her treatment of employees.

In addition to paying for renovation of the 28-room Helmsley mansion in Greenwich, Conn., company funds were used by Mrs. Helmsley to pay for a new swimming pool and a $130,000 indoor/outdoor stereo system at the estate.

According to testimony in the trial, she used company funds to pay credit card bills for underwear and other clothing from department stores, a $45,000 silver clock specially designed in the shape of the Helmsley Building in New York, and a leg waxing. The Helmsleys failed to disclose the money as personal income, as tax laws require.

The trial included testimony about her blithely firing household employees at Christmastime for petty infractions and demanding cash kickbacks from firms that supplied liquor to the Helmsley hotels. But, in arguing for a lenient sentence, her lawyer presented letters from several other Helmsley employees for whom Mrs. Helmsley had gone out of her way to assure adequate medical treatment, including two who had AIDS.

Helmsley, born Leona Mindy Rosenthal, came from a modest background, the daughter of a Brooklyn hat maker. She had had several careers before she met and married Harry Helmsley, including being a showroom model, cigarette vendor and, later, a successful Manhattan real estate broker. It was a second marriage for both.

Both Mrs. Helmsley and her husband still face similar tax charges in New York state court. They have pleaded not guilty, and a ruling is expected on whether Harry Helmsley is mentally competent to stand trial on the state charges.

Several Helmsley hotels in New York face loss of their liquor licenses because of Mrs. Helmsley’s felony conviction. State action on the subject is pending.

Judge Walker told the defendants that their attempts to cheat the government “undermines the system of voluntary compliance” on which the nation’s tax system depends. He said that the sentences should send a message to anyone thinking of falsifying a tax return that, “if you do it and you’re caught, you will go to prison.”

The two employees who had been convicted with her also were sentenced Tuesday to prison terms and fines. They were convicted of helping Mrs. Helmsley cheat the government through false tax returns, although the wrongdoing resulted in little direct financial gain to the employees.

Joseph V. Licari, 53, the chief financial officer of Helmsley Enterprises Inc., was sentenced to 30 months in prison, three years of probation and a $75,000 fine. Frank J. Turco, 47, who was vice president and chief of financial services for Helmsley Hotels Inc., was sentenced to 24 months in prison, three years of probation and a $50,000 fine. Their lawyers said they don’t intend to appeal, and the two are to begin their sentences on Jan. 16.

Turco has already pleaded guilty to state charges, and Licari is expected to do so today.