A federal grand jury has indicted Robert Falor, former chief operator and manager of The Falor Companies, on charges of tax evasion. Prosecutors are saying that he failed to pay more than 1.75 million in federal taxes over a three-year period.
Mr. Falor's companies owned a number of condo-hotel properties, including the Tides Hotel in Miami Beach. He made news in 2006 with a plan to open a series of hotels in Chicago and Miami Beach branded after Paris Hilton's sister, Nicky. The Miami Beach units never sold and Falor ended up suing Nicky Hilton for breach of contract.
Falor is being charged with failing to pay $189,246 for 2004, $494,261 for 2006 and more than $1 million for 2007. He didn't file for 2004 until 2007 and then allegedly under-reported his income so that instead of owing $189,246 he said he owed only $2,012.
Federal authorities say he did not report millions of dollars he took from the Hotel Blake in 2006 and 2007. They say he failed to report $2.9 million in capital gains from the dissolution of holding companies. And finally, that he didn't pay taxes on $1.65 million in loans that became taxable as income when he didn't pay them back.
Falor could be facing a 15-year prison sentence if convicted, as well as fines of $750,000 and the back taxes federal authorities say he owed.
CBS News, "Onetime "Condo-Hotel King' Arrested on Tax Evasion Charges," September 1, 2011.