Two motel owners lose property today for tax scam
Two motel owners will lose their motels today and may face jail time for their part in a tax evasion scam.
Mark Patel, 38, the owner of four South Shore motels including the one involved in the scam, and Scott MacDonald, 38, owner of Chateau Suites motel, will be sentenced in U.S. District Court in Sacramento. Both men pleaded guilty to one count of tax evasion. MacDonald also pleaded guilty to three counts of money laundering.
The two, along with Realtor Pembroke Gochnauer, were caught in an FBI sting as they tried to hide $500,000 in cash from the $1.2 million sale of Patel’s motel, Secrets, on Park Avenue near Stateline.
Both men claimed there was more to the story than the FBI investigation disclosed, but will not comment until after their sentencing.
Patel, whose parents and children live at the South Shore, owns four hotels in the area and several others out of state. He ran an informal group called the East Indian Motel Owners Association, with 38 members before it disbanded in 1997.
While “he kept to himself,” said restaurant owner Singh Boota, Patel was very involved in an effort five years ago to convince other motel owners to remove price signs in their windows.
Following a rebuke by the Federal Trade Commission and the local lodging association’s bylaw change, Patel spearheaded a door-to-door effort to get motel owners to take down price signs in their windows in June 1997.
“He was quite generous with his time in terms of the benefits and goals of the (lodging) association,” Stardust Lodge owner Ed McCarthy said.
Patel has also served on the board of the Lakeside Park Water District on Pine Boulevard, a neighborhood water resources group that covers the state line to Park Avenue from east to west and U.S. Highway 50 to the shoreline from north to south.
MacDonald, a relative newcomer on the motel scene, made a name for himself when he purchased a run-down 23-unit motel on U.S. Highway 50. He used redevelopment incentives to remodel the Old Silver Dollar Motel into 14 two-room suites. After an extensive overhaul, Chateau Suites opened in June 1997.
MacDonald, who once managed a Red Lion Hotel in San Jose, doubled the motel’s income in one year.
During the renovation project, MacDonald found a business partner and marketing consultant in Patel, whom he would see at South Lake Tahoe Lodging Association functions.
“He’d tell me, ‘You’ll need help marketing the motel,'” MacDonald said. “We’ve been friends since.”
As part of a plea agreement, Patel will forfeit his more than $800,000 interest in Secrets, face $2,500 in fines and may face jail time.
MacDonald will forfeit his $60,000 interest in Chateau Suites, may face up to six months in jail and a $2,500 fine.
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