PHOENIX — Officials have announced the seizure and shutdown of the Royal Inn in Phoenix, citing criminal charges, Travel Act violations, and money laundering and drug offenses.
Video from the scene Tuesday showed a large law enforcement presence around the property near Interstate 17 and Bethany Home Road.
At around 6 a.m., the Federal Bureau of Investigations (FBI) and the U.S. Marshal Service seized control of the hotel and shut down its operations. According to the U.S. Department of Justice, it stemmed from widespread prostitution and drug trafficking activities that went "unabated" by the owners and operators of the Royal Inn.
VIDEO: Authorities provide details in hotel seizure
The U.S. District Court unsealed a 44-count indictment that was returned by a federal grand jury on September 17 against the hotel's owner, operator, and corporate entity, among others. The indictment lists the following people and charges:
- 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. Varsha Patel was also 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.
The indictment alleges the defendants operated the hotel by renting rooms to people engaging in prostitution and drug dealing.
Between 2017 and September 2024, the defendants are accused of using the funds obtained from the Royal Inn room rentals to maintain and promote their hotel operations, pay the mortgage on personal property located in Chino Hills, California, pay for life insurance policies, and pay for their own personal expenses.
The indictment also alleges the defendants were aware of illegal activities happening at the hotel. Phoenix police also informed the defendants repeatedly about the illegal activities on the property, of the hundreds of calls for service police received, and of the need to take action on the criminal activities taking place.
Despite having been served with multiple abatement letters, the defendants continued to operate the Royal Inn to "intentionally facilitate and profit from the criminal activities occurring on the premises."
Below is a breakdown of the charges and possible punishments, according to the DOJ:
- A conviction for 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.
