[This is Part 6 of a series of articles that I am writing about the U.S. v. Parlato Et Al case. Along the way, I am detailing what a sham this case is – and how it was orchestrated by two inner circle members of the NXIVM criminal enterprise, Clare and Sara Bronfman, and a conman named Shmuel Shmueli – all three of whom just happened to be represented by the same attorney, William F. Savino.
I am also explaining how many of the slimy tactics that were used to indict Frank have become the norm in the everyday operations of the U.S. criminal justice system. Readers are encouraged to ask questions – which I will endeavor to answer on a timely basis].
In Part 5 of this series, I explained how Shmuel Schmueli – one of the key figures that led to the indictment of Frank Parlato – was able to scam hundreds of thousands of dollars through baseless and fraudulent legal actions.
Before I move on to other aspects of the U.S. v. Parlato case, I want to delve a little deeper into Shmueli and his bogus operations so that Frank Report readers will have a very clear understanding of just how dishonest and disreputable this guy is.
That’s important because, without the complaints that Shmueli and the Bronfman sisters filed through their mutual attorney, William F. Savino, the FBI would never have initiated an investigation of Frank and his various businesses.
Based on the business records that were subpoenaed during the course of the FBI’s investigation – and utilizing the technique known as “crime stacking – then-Assistant U.S. Attorney Anthony M. Bruce was able to convince a grand jury to approve a 19-count indictment against Frank.
When it was documented that Clare Bronfman had perjured herself in her testimony before that same grand jury – a felony for which she was never charged or prosecuted – the prosecution convinced a new grand jury to issue an 18-count superseding indictment that totally omits any reference to the Bronfman sisters.
All 18-counts in the superseding indictment are related to actions that Frank took – on the advice of his attorney – to protect his business interests and those of his business partner from Shmueli.
But even though this was all documented and explained to Assistant U.S. Attorney Bruce and his colleagues well before the original indictment was issued, they refused to back down.
Bruce had apparently made a commitment to his good friend, Wee Willie Savino, that Frank Parlato would be indicted regardless of what the facts were.
Using the Bronfman sisters’ money to back up his promises, Keith Raniere, the head of the NXIVM cult, often promised to pay influential attorneys and others large bonuses if they could get one or more of his enemies indicted.
Whether Savino was motivated in a similar fashion is not known – and will likely never be determined unless an independent investigation is someday undertaken by federal law enforcement officials from outside the Western District of New York (WDNY).
In any event, shortly after he fulfilled his commitment to get Frank indicted, Bruce retired from the U.S. Attorney’s Office in the WDNY – leaving behind the still-pending case of the U.S. v. Parlato Et Al (The case is scheduled to go to trial in May 2020).
So, let’s take a deeper look at Shmuel Shmueli…
A Trail of Deception & Deceit
In the early days of the Frank Report, Frank did a great job of documenting some of Shmueli’s dishonest practices.
A home mortgage fraud scheme that involved multiple property transfers between family members – and eventually a sale to an innocent couple – resulted in Shmueli being evicted from the premises and ordered to pay the new owners $56,668.81.
At the same time he was engaged in fraudulent schemes regarding his home, Shmueli was also operating Israel Shelanu (“Our Israel”), a weekly Hebrew newspaper in Brooklyn that catered to the local Jewish community.
But rather than pay reporters to write stories, Shmueli’s business model was built on the concept that he would simply re-publish – without permission – stories that appeared in other newspapers. This scheme came to an abrupt halt when several of those other newspapers sued him and his newspaper – and obtained judgments totaling $24 million.
Rather than pay the newspapers that he had ripped off for many years, Shmueli filed for bankruptcy in the U.S. Bankruptcy Court for the Eastern District of New York. At the time, he declared $24,501,978 of liabilities and $2,050 of assets.
Shmueli Comes to Niagara Falls
A few years after Shmueli was shut down in Brooklyn, he showed up in Niagara Falls, NY as the agent for David Ho, a Hong Kong businessman who had started what turned out to be a disastrous downtown development project there in 1999.
Five years after this project was launched, it was nothing more than a 40-foot deep hole in the ground just 200 feet from the entrance to the Niagara Falls State Park and a run-down, vacant nine-story building.
But what others saw as a civic disaster, Frank saw as a great business opportunity.
Making Something Out of Nothing
These “before” and “after” photos depict Frank Parlato’s success story in building a robust tourist center at 360 Rainbow Boulevard on the site of the abandoned Occidental Building that had become notable for the giant 40′ deep hole in the front. Parlato rolled up his sleeves, recruited a workforce, and transformed an eyesore into a tourist center, without a dime of taxpayer money and no help from the city.
Working both with Ho – and Larry Reger, a local businessman who had lent $2 million to Ho – Frank came up with a plan that eventually turned the project into a successful venture.
Reger and Frank became business partners – and working together, they turned the hole into a tourist parking lot and attracted numerous businesses to the adjacent 200,000 sq. ft. building that had been empty for years.
Reger received back all of his investment plus interest – and his estate still receives a six-figure annual payment from the project.
All was going well until Ho decided to return to Hong Kong in mid-2007 – and designated Shmueli as his agent.
Within days of Ho’s departure, Shmueli was making various “business proposals” to Frank.
Per one proposal, he wanted Frank to cancel his deal with Larry Reger – and to make Shmueli his new business partner. Frank rejected that proposal.
Per another proposal, he wanted Frank to pay him all the cash that was earned from the parking lot on weekdays – and to keep the parking fees from the weekend for himself (Shmueli wanted this arrangement concealed from both Reger and Ho). Frank rejected that proposal.
When he finally realized that Frank was not going to agree to any of his sleazy proposals, Shmueli switched tactics – and tried to intimidate Frank into doing what he wanted (He obviously did not know Frank very well).
He mentioned to Frank that he was associated with Mossad, the infamous Israeli intelligence service – and intimated that bad things could happen to Frank if he didn’t go along with one or more of his proposals.
When that didn’t work, he threatened Frank with numerous lawsuits that he promised would cost Frank hundreds of thousands of dollars to defend – and divert his attention away from his businesses.
Although no one ever from Mossad showed up, Shmueli did, in fact, carry out his threat about the lawsuits.
Over the next several years, Shmueli initiated ten different lawsuits against Frank and Larry Reger.
And utilizing his previously-mentioned, fraudulent litigation scheme, Shmueli got investors to put up money to fund these various lawsuits – and then stiffed most of the attorneys who he hired to represent him.
In all, more than twenty-five attorneys were involved in the numerous lawsuits that Shmueli initiated against Frank and Reger.
In addition to not getting fully paid for all their work, none of those attorneys won a single lawsuit.
At the end of the legal barrage, Frank and Larry Reger had a 10-0 record against Shmuel Shmueli.
They had also spent more than $1 million defending themselves against Shmueli’s legal onslaught.
In Part 7 of this series, I’ll describe in more detail how Frank, acting upon the advice of his attorney, took various proactive measures to protect himself and Larry Reger from Shmueli.
And I’ll document how federal law enforcement officials have attempted to twist those totally legal actions into 18 felony charges against Frank.
Stay tuned…we’re just getting to the good stuff.