At 12:02 PM on Tuesday, January 7th, a commenter using the handle “Anonymous”, posted a comment about my most recent analysis concerning the case of the U.S. v. Parlato.
While I welcome any comment concerning my various posts about this case, I was especially glad to get this one.
That’s because it appears that it was written by someone who has chosen to use the same tactics that I have predicted the prosecution will use in its efforts to convince twelve jurors – beyond a reasonable doubt – that Frank committed 18 felonies simply because he owned 15 companies and had approximately 50 bank accounts over a 12-year period.
Those tactics include INSINUATIONS, INNUENDOS, IMPUTATIONS – and, of course, MISINFORMATION & MISSTATEMENTS.
Here’s the full comment from Anonymous:
Hey Joe — According to the Niagara Gazette, in 2010 Frank owed $1.57 million in outstanding city and county taxes on One Niagara. When did he pay all of that back?
The Gazette also said that “Parlato failed to disclose the $1 million in income on a 2008 federal income tax return. In 2013, after the federal grand jury investigation was underway, Parlato filed a 2008 income tax return, but claimed the $1 million payment from the Bronfmans was a “loan.” So are you saying this isn’t true, that the FBI and IRS are lying about this?
Also all you need to do is look at this site to know that Frank routinely disregards laws. He is constantly using copyrighted images without proper attribution and probably without permission as well. And he can’t claim ignorance either https://archives.cjr.org/behind_the_news/niagara_falls_reporter.php. Pretty hypocritical and ironic considering he made a point of noting that the “lost” and never seen Necker Island photos were copyrighted.
Let’s take a look at the details of Anonymous’ comment.
RE: The Unpaid Property Taxes
Anonymous starts out by quoting from a 2010 article in The Niagara Gazette that indicates Frank owed $1.57 million in unpaid taxes on the former Occidental Building in downtown Niagara Falls – and then questions whether Frank ever paid those back taxes.
What Anonymous failed to do, however, is add the fact that shortly after acquiring control of the abandoned building, Frank had contested the assessment on it that led to those “unpaid taxes” – and that he eventually won a huge reduction in its assessed value: i.e., from $4 million down to $1 million.
What Anonymous also failed to do is mention that lots of commercial businesses routinely contest the assessed value of their properties – especially when those properties, like the Occidental Building, have suffered a serious decline in market value (Before Frank got involved, the Occidental Building had been abandoned for 4 years – and had a gaping 40’ deep hole in front of it).
Had Frank paid the disputed taxes, he quite likely would not have received any rebate even if he won his lawsuit to have the property’s assessed value reduced to its current market value.
So, acting on the advice of his attorney, Frank withheld paying the taxes until the assessed value was properly reduced. Once that happened, the taxes were paid in full.
RE: Alleged Failure to Disclose $1 Million in Income from Bronfman Sisters
Next, Anonymous adds another quote from The Niagara Gazette which indicates that Frank had failed to report as income the $1 million that he received from Clare and Sara Bronfman in 2008 – and that he subsequently claimed that the payment was actually a loan.
Anonymous then confronts me with the following question: “So are you saying this isn’t true, that the FBI and IRS are lying about this?” (You can almost feel how excited Anonymous was in typing out there words).
As Frank has indicated on several occasions – and, more importantly, as documents and records will attest – these are the relevant facts as regards this $1 million payment:
– Because he was well aware of the propensity of the Bronfman sisters to sue people that were identified as “enemies” of Keith Raniere, he was concerned about what to do with the $1 million payment. So, instead of spending it, he put the entire amount into an interest-bearing escrow account – where it remained until it was seized by the Feds in August 2015 in conjunction with its indictment of Frank.
– Frank’s concern turned out to be accurate because the Bronfman sisters sued him in 2011 to get back the entire $1 million. In that lawsuit, they alleged that the $1 million payment was, in fact, a loan – and that they were entitled to be repaid the entire amount (That lawsuit is still pending).
– While it is true that Frank was late in filing his 2008 federal taxes, it is also true that when he did file them, he had no tax liability for that year. And it’s also true that, acting upon the advice of his attorney, he included with his filing a letter explaining the issues concerning the $1 million – and the fact that he had placed all the funds into an escrow account. Interestingly enough, the IRS never contacted Frank about the $1 million.
I don’t know what the FBI and the IRS are saying about the $1 million – but I do know that Frank acted in a responsible and thoughtful manner with respect to the reporting of that payment. Had he recorded it as income and paid the estimated $300,000 on taxes on it, he would only have $700,000 left to repay the Bronfman sisters if they prevail in their pending civil lawsuit against him.
That would have been a financial disaster because getting even if he was successful in getting the IRS to repay the $300,000, that likely would have taken several years.
RE: The Necker Island Pictures
Next, Anonymous caustically derides Frank for allegedly using copyrighted photos without attribution or permission. He’s particularly focused on the various photos from the NXIVM get-togethers at Richard Branson’s Necker Island resort.
Once again, let’s look at the relevant facts as regards those photos:
– They were sent to Frank from a source that wished to remain anonymous.
– Had anyone asserted ownership of those photos, Frank would have had to determine whether that claim was true or not. No one, however, has ever made any such claim.
– Many of these photos were previously published by John Tighe on his Saratoga In Decline blog – and, as such, they may be considered to be in the public domain (John was also never contacted by anyone claiming to own the pictures he published).
– Finally – and perhaps most importantly – Section 107 of the federal copyright law states as follows: “…the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright”.
A Question for Anonymous
Since Anonymous seems to be enthralled with media stories about Frank, let me ask her/him a question.
Rather than relying on the 2010 article that you cited, why didn’t you point Frank Report readers to the more recent article about Frank that appeared in the December 6, 2016 edition of The Niagara Falls Reporter?
Here are some excerpts from that article – which was written by Tony Farina, along-time media investigative journalist who just last year was elected to the Buffalo Broadcasters Association Hall of Fame:
By Tony Farina
Not too many years ago, in 2004, the onetime Occidental Chemical Corp.’s namesake building, built in the early 1980s, was a shell of its former grandeur, left to deteriorate by Occidental with only a single tenant remaining, the federal Small Business Administration, which was about to leave at the expiration of its lease.
The landmark building next to the Rainbow Bridge was an eyesore, made even worse by a giant empty hole taking up the entire parcel along Rainbow Blvd. that according to the developers holding sway at the time was to become a giant fish tank to attract visitors from around the world to Niagara Falls. The fish tank hole never got any fish and the SBA was leaving, leaving an empty, broken down, giant eyesore behind. But then something happened.
I have been a newspaper and television reporter most of my life and along the way I have met many people. One of them was a real estate developer named Frank Parlato of Buffalo who I came to know while chasing down a story in the streets of the city I had prowled for more than 30 years.
Well, one thing led to another, and one day after a breakfast meeting in the spring of 2004 with Parlato and a businessman with knowledge of the developing eyesore in Niagara Falls, we visited the Occidental Building and I remarked to Parlato, “this is quite a place, given the tremendous view from the top and the location next to the mighty falls. Too bad it is falling apart. It would be a great location to make something happen.”
Parlato felt the same way, and with his experience in real estate saw a business opportunity. With the Hong Kong owner running out of money, Parlato found a way to acquire the property and the rest is history. Without a dime of public money, he filled the giant hole and began to fix up the property, selling coffee and trinkets to start and bringing in a tour company to give visitors a guided tour of the historic places of Niagara Falls, starting with the mighty falls itself. That was just the beginning.
It took stamina and grit to get the hole filled, scotch tape and screwdrivers to get the building habitable, and some chalk to establish parking spots on the now covered hole. Piece by piece, opposed by city inspectors every step of the way, Parlato made something out of nothing.
There were back tax issues to deal with, too, although Parlato contended the property had been overtaxed for years and he filed suit against the city and eventually, after he sold the property in 2010, the lawsuit he started was settled with the city and a large discount in taxes proved he was right all along.
The new owners, including Gordon Reger and Paul Grenga, are now doing quite well on the property that had not too long ago been headed to the scrap heap.
It is a success story that tells about the resourcefulness and commitment of Parlato when it comes to business, and he did it all the while fighting behind the scenes with an alleged representative of the former owner who, once the property had been turned around, was anxious to get more than his rightful legal share – as the 10 lawsuits against Parlato established. Parlato won all 10 lawsuits.
Parlato has moved on but his work is still there for everyone to see, a busy tourist destination visited by millions of people every year, even opening briefly every day over the winter months for those hardy enough to still go to the falls, from near and far.
Parlato now finds himself fighting a federal corruption indictment that was at least partially fueled by the disgruntled minority partner who couldn’t win in court to siphon off the profits that Parlato had earned through hard work, sweat and dedication. I remember many nights when he worked around the clock to keep his project moving, providing more than one hundred jobs for many local people who might otherwise have gone hungry. And the bus tour, restaurant and retail businesses boomed, providing profits for local business people, who Parlato favored over chains and franchises.
As he was building the businesses, he not only successfully fought his deceptive minority partner, but fought the city which tried to close the building repeatedly and choke the property with excessive taxation. He also had to fight the State Parks who clearly complained that his business was taking away their near monopoly parking revenue – they tried to prevent him from even placing signs on his own businesses. But he fought and won – even placing a giant sign on his property in defiance of the State Park – with arrows right at the entrance – pointing one way to the State Parks’ $10 parking and an arrow pointing to his parking lot – at $5.
Now Parlato is fighting the federal government, and much like the grit he showed in developing the falls property, he is refusing to admit he did anything wrong (take a plea) when he feels he did absolutely nothing wrong.
Last week I wrote that he may have been the victim of a “ham sandwich” indictment, the kind where prosecutors can make a case just because they want to, even though the evidence may not quite be what it seems to be. But what does a grand jury know? They can only consider what it presented to them, and Parlato’s legal team believes they were misled by prosecutors.
That case is pending and a trial could be months–even years–away. The ordeal has been costly in financial terms, but while most people would be reduced to stress and fear at the enormous strain of having the most powerful government in the world train its sights on you, Parlato said this battle only makes him feel stronger, quoting his favorite saying, “If the whole world stands against you, sword in hand, will you still dare to do what you think is right?”
Parlato truly feels he has been falsely cast as a villain by malicious and perhaps politically motivated prosecutors when all he did was develop a building, create lots of jobs, and make lots of people money, even one of his alleged victims, a now-deceased business partner, who never said he was defrauded.
How it will all end for Parlato remains to be seen. But the developer-turned-journalist is fighting back, in part with the pen, against what he feels is a concocted indictment.
The ball is in your court, Anonymous… And if you’d really like to have a detailed discussion about these matters, I’m sure you know how to get in touch with me.