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Local developer tangled in legal battle; Parlato accused of fraud in dispute over fee in Los Angeles real estate negotiations

Heirs to the Seagrams liquor fortune turned to a well-known Niagara Falls developer three years ago for help in settling a $26 million real estate dispute in Los Angeles.

Today, Clare and Sara Bronfman are accusing Frank Parlato of defrauding them out of $1 million, an allegation the developer claims is baseless.

The Bronfmans' notice of claim and a potential counter-claim by Parlato are the latest chapters in an ongoing legal battle that also involves an Albany-based self-help group that critics claim is a cult.

"I didn't defraud anybody," Parlato said last week. "This was all above-board. I feel I earned my money."

At issue is the $1 million the Bronfman sisters paid Parlato for representing their interests in a luxury housing development in Los Angeles.

The sisters, in a notice of claim filed in State Supreme Court in Niagara County, accuse the developer of fraud, deceit and breach of contract, and seek an unspecified amount of money in damages.

William Savino, the Buffalo lawyer who filed the Bronfmans' claim, declined to comment.

Parlato, a well-known local developer, became associated with the Bronfmans in 2007 when he was recruited by G. Steven Pigeon, the former Erie County Democratic Party chairman.

Parlato said he traveled to California at the Bronfmans' urging and came away convinced they were cheated out of millions of dollars.

By the time he was done, he said, he had secured an agreement that gave the sisters majority control over the Los Angeles development.

"I got them an ownership interest," Parlato said. "I earned my compensation in spades."

Parlato said the culprits in the real estate dispute were Yuri and Natasha Plyam, Los Angeles developers who oversaw the housing development until he took over in 2008.

The Plyams, in turn, claimed Parlato drove the project into the ground.

The dispute led to lawsuits by both sides, including one that involves Nancy Salzman, president of NXIVM, a group based in Albany that supporters say is a successful executive coaching program.

Salzman and group founder Keith Raniere, whom members call "Vanguard," are regarded by supporters as inspirational mentors.

Others say NXIVM uses brainwashing and other psychologically damaging tactics, including separation from members' families, to manipulate followers.

"I think it's a cult," Edgar M. Bronfman Sr., the Bronfmans' father, told Forbes magazine in 2003.

The Bronfman sisters, who live in Albany and now work as coaches for the group, are among NXIVM's better known followers.

Court papers filed as part of the Los Angeles real estate dispute go so far as to portray the group as a cult and Raniere as a compulsive gambler who controls the Bronfmans. The suit also contends that Raniere engaged the Seagrams' heirs in a commodities investment that cost them $65 million.

A lawyer for the Bronfmans has denied all those allegations.

In the same case, the Plyams accused Parlato of pretending to represent Edgar Bronfman Sr. while actually representing Raniere, an allegation Parlato denied last week.

While extremely critical of the Plyams, Parlato stopped short of criticizing the Bronfmans. He made it clear, however, that he's prepared to take them on if they pursue a lawsuit against him.

"I haven't been served," he said of the sisters. "There is no lawsuit. But if there is, I'll give tit for tat with compound interest."

His lawyer views the Bronfmans' notice of claim as an attempt to preserve their legal rights in the event they lose the Los Angeles case and have to go after Parlato.

"I think it has to do with the L.A. case," said Paul Grenga, a Niagara Falls lawyer who represents Parlato. "I think it's the lawyers preserving every right on behalf of a wealthy family."

e-mail: pfairbanks@buffnews.com