Frank Parlato Jr. is taking the offensive in his five-year battle with federal investigators.
Parlato, a well-known real estate developer and newspaper publisher, is accusing the FBI of creating a "fictional narrative” as part of his prosecution on fraud, money laundering and conspiracy charges.
In court papers, Parlato points to what he claims are inaccuracies – 38 in all – in an FBI affidavit seeking search warrants to suggest that investigators are concocting evidence against him.
“These aren’t your run of the mill mistakes,” Parlato said Monday. “There’s a pattern emerging here.”
Parlato, who is accused of cheating the Internal Revenue Service and two heirs to the Seagrams liquor fortune, believes the FBI’s inaccuracies were passed along to the grand jury that indicted him.
The 19-count indictment against him 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.
“This case is dead on arrival,” Parlato said. “Our motion shows they concocted a motive without a scrap of evidence.”
The FBI declined to comment on Parlato’s allegations and prosecutors indicated their response would come later in court papers.
“In cases such as this, in which there is an indictment pending, our practice is to respond to defense motions through legal documents we file in court, not through statements to the media,” Acting U.S. Attorney James P. Kennedy said in a statement.
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 Sara and Clare 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.
When asked about the significance of the alleged inaccuracies, Parlato pointed to the FBI’s characterization of Niagara Falls businessman Lawrence Reger as one of his victims. Parlato says Reger, who died last year, was a friend and a business partner, not an adversary.
By portraying Reger as a victim, Parlato believes the government is trying to manufacture a motive for his alleged crimes.
In a letter to prosecutors last year, a lawyer for Reger’s estate said his former client never claimed to have been victimized by Parlato.
“Likewise, it is the position of Larry's family – who now owns his Niagara Falls interests – that Larry was neither cheated nor defrauded by Parlato,” said Gregory P. Photiadis of Niagara Falls.