PHOENIX (AZFamily) — The owner of a Phoenix motel that served as a hub for prostitution and drug activities has learned her sentence.
Varsha Patel, 57, of Chino Hills, California, was sentenced Feb. 4 to five years of probation and ordered to surrender the Royal Inn motel and $744,000 in cash, as well as pay a $5,000 fine.
Patel previously pleaded guilty to a racketeering-related charge.
According to federal court documents, Patel operated the Royal Inn, along the “The Blade,” which runs along 27th Avenue in central Phoenix.
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Patel ran the motel through her company, Sarang Hospitality LLC, from 2017 through September 2024.
In previous reporting, Arizona’s Family broke down how the motel operated and the history of law enforcement activity at the property.
Court documents detail how Patel and her cousin Nilam Patel, who was the motel’s manager, rented rooms to people engaging in prostitution and drug deals.
The feds said the motel operators had an elaborate system with rules set in place for the sex workers, including how to attract customers, where to park off property and alerting them when police were at the motel.
The indictment shows the pair failed to follow the proper channels when renting rooms, did not evict people engaged in prostitution and did not call police when illegal activity was happening.
“This sentencing is the culmination of several years of hard work by both the FBI and the Phoenix Police Department. The defendant knowingly and willingly operated the Royal Inn to facilitate the sexual exploitation of people and the sale of drugs,” said FBI Phoenix Special Agent in Charge Heith Janke in a written statement Tuesday. “The defendant essentially operated a marketplace of illicit activity and profited for years while turning a blind and uncaring eye to the families that live in that neighborhood.”
From January 2017 to May 2023, the feds said Patel used the money from the illegal activities to pay the mortgage on the motel and the mortgage of a home in Chino Hills, California. It was also used for life insurance policies and daily living expenses.
Nearly 7 years of police activity ignored
In May 2019, police told Patel that there had been 200 calls for service at the Royal Inn since January 2017. In the first six months of 2023, that number had grown to 177 calls, according to court documents.
Despite multiple letters and interactions with law enforcement over the years, Patel continued operating the motel as a hub for illegal activities.
Scheme shut down
Phoenix police and the FBI searched the property in September 2024. Following the search, the U.S. Marshals Service closed down the motel and fenced off the property.
“When federal and local law enforcement team up it’s a force multiplier. In this case, the Phoenix Police Department, FBI and U.S. Marshals joined forces to shut down the Royal Inn, making an immediate and significant impact on public safety,” Courchaine said. “Together, we will take decisive action to ensure Arizonans live in communities where families, schools, and businesses can thrive.”
Phoenix Police Chief Matt Giordano said in a statement Tuesday that partnerships with federal agencies are critical in taking down these kinds of crime rings.
“By working together, we ensure that those who profit from illegal enterprises are held accountable,” Giordano said. “This case demonstrates that when law enforcement agencies work together, we can restore safety and security to the areas most impacted by crime.”
Additional defendants and charges
The federal indictment also named Nilam Patel, who was also charged in connection to the motel’s illegal operations.
Anthony Curtis, Otis Childers, Chauntelle Mills and Leonardo Guerrero were also charged for allegedly distributing fentanyl and methamphetamine at the motel.
Varsha also faced charges for making false statements on Small Business Administration loan applications in 2020 and 2021, claiming her business was not enabling illegal activity while asking for $125,500 in loans.
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