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Defense: Mrs. Helmsley Didn’t Know About Phony Bills

August 24, 1989

NEW YORK (AP) _ Hotel magnate Leona Helmsley was so paranoid about being overcharged and so nasty to her employees that they schemed to bill her personal expenses to her businesses without her knowing, her lawyer says.

″This system was in no way designed to cheat the Internal Revenue Service,″ the attorney, Gerald Feffer, said in closing arguments Wednesday to the jury in Mrs. Helmsley’s criminal tax evasion trial.

Mrs. Helmsley, 69, is accused of evading $1.2 million in federal taxes by charging personal expenses, including renovations at her Connecticut estate, to her businesses. Her husband, Harry, also was charged but was separated from the trial because of deteriorating mental capacity.

Former aides Frank Turco and Joseph Licari are co-defendants at the trial, charged with assisting in the scheme. Their lawyers planned to present closing statements today.

Feffer said Mrs. Helmsley had nothing to do with the phony bills.

He said the Helmsleys had legitimately charged their $5 billion real estate and hotel empire for half the cost of renovating and operating their $11 million Connecticut estate because they used it for business.

The problems began when Mrs. Helmsley refused to pay contractors hired to work on the mansion, Dunnellen Hall, he said.

″It is clear from the evidence that Mrs. Helmsley believes she was being ripped off, that she was absolutely paranoid that she was being overcharged,″ Feffer said.

Her employees designed a system to pay the bills ″and yet at the same time minimize the hassle and problems of dealing with Mrs. Helmsley,″ he said.

″There’s no question that Mrs. Helmsley was a very tough person to deal with,″ Feffer said.

Assistant U.S. Attorney Cathy Seibel painted a different picture of the Helmsley finances during 1983-85.

Seibel said Mrs. Helmsley intentionally evaded more than $1 million in taxes by charging personal expenses to her businesses because she was cheap and arrogant.

″If there’s one thing you learned at this trial, it’s that just because you’re rich doesn’t mean you’re not cheap,″ Seibel told the jury. ″The Helmsleys kept an eagle eye on every penny.″

Seibel brought up testimony from Mrs. Helmsley’s former housekeeper that Mrs. Helmsley once told her, ″We don’t pay taxes. Only the little people pay taxes.″

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