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Judge rejects Parlato's claim of concocted evidence in Seagrams, IRS case

Frank Parlato Jr. claims the FBI concocted evidence against him.

A federal judge challenged that allegation in a decision this week that rejects the Buffalo newspaper publisher's attempts to dismiss charges that he cheated the IRS and two heirs to the Seagrams' liquor fortune.

In recommending the prosecution continue, U.S. Magistrate Judge Jeremiah J. McCarthy pointed to Parlato's "laundry list" of alleged inaccuracies in an FBI affidavit – 38 in all – and said none of them supports a dismissal of the charges.

McCarthy also rejected Parlato's claims that the inaccuracies were passed along to the grand jury that eventually indicted the developer and Artvoice owner.

The judge's ruling was hailed by Anthony M. Bruce, the federal prosecutor who handled Parlato's case until his retirement last year.

Bruce said the judge's ruling refutes Parlato's claims that Bruce intentionally misled the grand jury.

"It is clear from the judge’s ruling that the very basis of that attack was wrong," Bruce said in a statement. "I was a federal prosecutor for over 37 years and I am proud of every moment I spent in that job, Mr. Parlato’s personal attacks notwithstanding."

McCarthy's decision, which is essentially a recommendation, will be forwarded to Chief U.S. District Judge Frank P. Geraci Jr.

Parlato, who sought to end the criminal case against him, said the judge was wrong to look at each of the FBI's 38 inaccuracies individually instead of evaluating them in "totality."

"The ruling doesn't change the facts of the case," he said Wednesday. "We're going to receive complete vindication."

He also claimed to now have evidence that Clare Bronfman, one of the Seagrams' heirs he is accused of cheating, gave "contradictory statements" about her business dealings with him when she testified before the grand jury.

"This is a huge discovery, and it overturns everything in McCarthy's ruling," Parlato said of the new evidence.

Parlato also promised to continue his "investigation" into Bruce and his allegations of prosecutorial misconduct. Bruce has been the target of a public campaign waged by Artvoice and the Niagara Falls Reporter, Parlato's other weekly.

The 19-count indictment against Parlato charges him with fraud, money laundering and conspiracy and claims he orchestrated a scheme that involved 15 shell companies, 50 bank accounts and multiple attorney trust accounts. He faces a maximum of 20 years in prison if convicted.

The criminal charges against Parlato are the result of a four-year investigation into his business dealings in Niagara Falls and his ownership of One Niagara, the downtown office and retail center that many still remember as the Occidental Chemical building.

As part of the probe, the government seized $1 million that Parlato received from Clare and Sara Bronfman, daughters of the late Seagrams liquor heir Edgar M. Bronfman.

Parlato, who is part-owner of Artvoice and publisher of the Niagara Falls Reporter, has denied the allegations that he cheated the IRS and the Bronfmans. He insists the $1 million is money he earned for representing the Bronfmans in a dispute over a luxury housing development in Los Angeles.

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