Famous Fridays: Leona Helmsley, Angry Employees Strike Back

Helmsley Photo 1Leona Helmsley became a household name in the 1970’s for her lavish lifestyle and marriage to billionaire hotelier Harry Helmsley.  Perhaps she is best known for disinheriting two grandchildren and leaving $12 million to her Maltese, Trouble, after her death in 2007.  During her lifetime Helmsley was known for her harsh treatment of Helmsley Hotel employees and appearing in ads as the perfectionist “queen” wanting nothing but the best for her guests.  She didn’t just get the “Queen of Mean” nickname by treating her employees poorly; she also sued her son’s estate after his death evicting her daughter-in-law shortly after the funeral.

The Helmsley’s were once among the largest property holders in the United States.  Their property portfolio included the Empire State Building, Helmsley Palace, Hotel St. Moritz and many other hotels and buildings across the world.  Despite their tremendous wealth, the Helmsley’s constantly fought with contractors and vendors over payments.  Their mistreatment of employees and squabbles over bills are the stuff of legend and left prosecutors rife with eager witnesses when it came time for trial.

Helmsley was just as arrogant about her taxes, famously telling her housekeeper: “We don’t pay taxes, only the little people pay taxes.”  Helmsley participated in several schemes to avoid paying millions of dollar in income and sales taxes. 

In 1985, Helmsley testified in front of a grand jury about her elaborate sales tax avoidance scheme with jewelry store, Van Cleef & Arpels.  Attempting to avoid New York sales tax, she worked with Van Cleef & Arpels employees to purchase millions of dollars in jewelry and have it shipped to another state.  Helmsley was granted immunity in exchange for her testimony.

The Helmsley’s also were creative with their approach to income taxes.  In 1983, they purchased Dunnellen Hall, a mansion in Greenwich, Connecticut for $11 million, and proceeded to spend over $8 million remodeling the home.  The renovations included a marble dance floor, a swimming pool enclosure, and a $130,000 sound system.  When they refused to pay for the renovations, the contractors reported Helmsley and testified that she instructed them to bill the renovations to Helmsley Hotels so that she could treat them as business expenses. In 1988, Rudy Giuliani, then U.S. Attorney, indicted Leona and her husband on 188 counts of sales tax fraud, state and federal tax evasion, and extortion.

Helmsley was convicted and sentenced to 16 years in prison.  On appeal, 180 counts of the charges were dismissed and her sentence was reduced.  She ended up spending 18 months in federal prison and paid an $8 million fine.

Donald Says “File!”

No, not Mr. Trump, but an older (and more patriotic?) icon of American culture reminds citizens of their duty to file their taxes in this 1943 video produced for the War Activities Committee of the Motion Pictures Industry.

Individual income tax returns are due today. If you still haven’t made it to the bottom of that shoebox of receipts, then make sure to get in your automatic extension to file by the end of the day.