BUFFALO — Former Falls businessman and newspaper publisher Frank Parlato has pleaded guilty to a single count of failure to file an IRS form in 2010 for the receipt of more than $10,000 in cash.
The money was rent from a vendor at the One Niagara Building, which Parlato owned and managed at that time.
He faces a sentence of 24 to 34 months in prison. He will pay restitution of $184,939.51.
This is a breaking news story and will be updated.
In late June, federal prosecutors and attorneys for Parlato and his partner Chitra Selvaraj, told U.S. District Court Judge Richard Arcara that despite “multiple discussions about a possible plea ... no plea has been reached.” Parlato and Selvaraj were facing a trial date of Sept. 13.
Parlato and Selvaraj were most recently charged in a superseding indictment handed up in May 2018. That indictment dropped a number of claims, made by prosecutors, when the pair was originally charged in 2015.
The superseding indictment alleges a conspiracy “to defraud the United States and certain members of the public,” while adding additional claims that Parlato and Selvaraj attempted to obstruct the function of the Internal Revenue Service.
Charges of wire fraud and wire fraud conspiracy, money laundering, and corrupt interference with the administration of the IRS laws remain in the superseding indictment.
Parlato, 62, the former owner of the One Niagara building, a local real estate investor, publisher of the Niagara Falls Reporter and editor-in-chief of the weekly newspaper ArtVoice, and Selvaraj, 41, who has functioned as the chief financial officer for Parlato’s business enterprises, have each previously pleaded not guilty to the charges contained in the indictment.
The original indictment followed a four-year investigation into Parlato’s business dealings. The investigation first became known in 2011, when federal agents served subpoenas looking for records at the One Niagara building.
Parlato and Selvaraj are accused of orchestrating a scheme to defraud the IRS through the use of an array of limited liability corporations and partnerships. The indictments catalog the use of more than 15 so-called shell companies, 50 bank accounts and multiple attorney trust accounts in perpetrating the scheme.
Prosecutors have charged the scheme involved the movement of large sums of cash through multiple accounts.