Royal Inn Hotel searched and shut down by law enforcement for allegedly allowing criminal activity

PHOENIX – A joint law enforcement effort searched and shut down a Phoenix hotel accused of allowing prostitution and drug trafficking, authorities announced.

On Tuesday around 6 a.m., the FBI, U.S. Marshal Service and Phoenix Police Department executed search seizure warrants of the Royal Inn Hotel, located near Bethany Home Road and 27th Avenue.

A 44-count indictment against the hotel’s owners, operators and corporate entity were unsealed by the United States District Court on Tuesday.

Six and one corporate entity were named in the indictment, according to the U.S. Attorney’s Office for the District of Arizona.

• Varsha Patel, 56, of Chino Hills, California, the owner of Royal Inn, was charged with two counts of using a facility of interstate commerce in aid of racketeering, one count of maintaining a drug premises and 34 counts of promotional money laundering. Patel was charged with multiple counts of making false statements to obtain a small business administration loan.
• Sarang Hospitality LLC, aka Royal Inn, the Arizona corporation through which the hotel does business, was similarly charged with two counts of using a facility of interstate commerce in aid of racketeering, one count of maintaining a drug premises and 34 counts of promotional money laundering.
• Nilam Patel, 54, of Phoenix, the live-in operator and day-to-day manager of the Royal Inn, was also charged with two counts of using a facility of interstate commerce in aid of racketeering, one count of maintaining a drug premises and 34 counts of promotional money laundering.
• Four other individuals were charged with distribution of fentanyl and methamphetamine for drug dealing at the Royal Inn: Anthony Curtis, 42, of Buckeye; Otis Childers, 31, of Phoenix; Chauntelle Mills, 24, of Phoenix; and Leonardo Guerrero, 49, of Phoenix.

Guerrero was the only person to be arrested. Arrest warrants were presented for the other suspects.

The indictment alleges that Varsha, Nilam and Sarang Hospitality LLC, rented rooms to people involved with prostitution, drug dealing and drug using. They are claimed to have known illegal activities were taking place but despite warnings from Phoenix police, they continued their operations.

The defendants are accused of:

• Renting rooms to persons who overtly engaged in prostitution and to persons who distributed illegal drugs
• Directing the sex workers to attract sex buyers off the property and to walk separate from the sex buyer while going to the room
• Directing the sex workers, pimps and drug dealers to park off the property
• Alerting sex workers, pimps and drug dealers of law enforcement presence
• Failing to request a credit card together with a government-issued identification, in order to rent a room
• Failing to evict persons engaged in prostitution and drug dealing, thereby allowing lengthy stays at the Royal Inn without detection
• Failing to call the police when criminal activities were occurring.

What sentences could the defendants in the indictment face if convicted?

• Using a facility of interstate commerce in aid of racketeering carries a maximum penalty of five years in prison and a $250,000 fine.
• A conviction for maintaining a drug premises carries a maximum penalty of 20 years in prison and a $500,000 fine.
• A conviction for promotional money laundering carries a maximum penalty of 20 years in prison and a $500,000 fine.
• A conviction for making false statements to obtain a small business administration loan carries a maximum penalty of two years in prison and a $250,000 fine.
• A conviction for distribution of fentanyl and methamphetamine carries a maximum penalty of 20 years in prison and a $1,000,000 fine.