BUFFALO -- A federal grand jury has handed up a new 18-count superseding indictment against businessman Frank Parlato Jr. and his partner Chitra Selvaraj.
The indictment, which was filed by the U.S. Attorney for the Western District of New York in U.S. District Court in Buffalo, drops a number of claims from the original indictment, involving allegations of 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 also remain in the superseding indictment.
Parlato, 60, the former owner of the One Niagara building, a local real estate developer, 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.
Parlato told the Gazette on Wednesday night that nothing has changed as a result of the superseding indictment.
“The government knew they had no case (with the original indictment) and they still have no case,” Parlato said. “You’ve heard of fake news, this is a fake 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.
That indictment, and the new indictment, charge Parlato and Selvaraj with orchestrating a scheme to defraud the IRS through the use of a dizzying array of limited liability corporations and partnerships. The indictment catalogs the use of more than 15 so-called shell companies, 50 bank accounts and multiple attorney trust accounts in perpetrating the scheme.
Prosecutors charge the scheme involved the movement of large sums of cash through multiple accounts.
At least one lawyer involved in the case likened the investigation of Parlato’s business dealings to a game of Whack-A-Mole.
But missing from the superseding indictment are the claims that Parlato defrauded business associates, including Canadian liquor business heiresses Clare and Sara Bronfman.
“The subtraction is more important than the addition,” Parlato said, noting the elimination of charges in the indictment relating to his business dealings with the Bronfmans while acknowledging that prosecutors have added claims involving his shuffling of money through a maze of business accounts.
Parlato said the “Bronfmans disappeared” from the new indictment because he had exposed their involvement with the leader of a secretive group in upstate New York that has been accused of turning female followers into “brainwashed slaves,” some of whom were branded and coerced into having sex.
Keith Raniere, co-founder of the group called NXIVM, is facing a criminal complaint in U.S. District Court in Brooklyn charging him with sex-trafficking. Parlato has been credited with helping to expose Raniere’s activities.
Parlato said prosecutors dropped their claims from the superseding indictment because, “I exposed to the world the criminal sex cult that the Bronfmans were an integral part of.”
Over the years, Nxivm attracted a following that included Emmy Award-winning actress Allison Mack as wells as the Bronfmans. Prosecutors in Brooklyn have charged that the heiresses to the Seagram’s liquor fortune have given millions of dollars to Raniere.