Phoenix hotel shut down in connection to drug, money laundering investigation

FBI seizes and shuts down Phoenix motel

A Phoenix motel is seized and shut down by federal and local law enforcement officials, after a new indictment accuses the motel's owners of being aware of prostitution, drug use, and drug dealing through the lodging. FOX 10's Kenzie Beach reports.

PHOENIX - Authorities say they seized a Phoenix hotel on Sept. 24 in connection to a drug and money laundering investigation.

Video from SkyFOX over the Royal Inn hotel, located near Interstate 17 and Bethany Home Road, showed a large law enforcement presence in the parking lot.

The U.S. Attorney's Office says the FBI and Phoenix Police seized the hotel "for violations of the federal Travel Act and money laundering offenses."

According to the Department of Justice, the Travel Act "prohibits travel or the use of facilities of interstate or foreign commerce for the purpose of furthering an ‘unlawful activity’ as defined under the Act."

Details in indictment released

Officials said seven defendants were listed in the 44-count indictment, which states that the owner and operator of the hotel was aware of all of the illegal activities, and was profiting off of it.

From Jan. 2017 to May 2023, there were 677 cash deposits to the property owners under the name "Sarang Hospitality," totaling $1.7 million.

The indictment alleges Varsha Patel listed his daughter and wife on the bank account for Sarang Hospitality. The money was allegedly used for a mortgage on a home in California, as well as day-to-day expenses.

"For several years, they were knowingly and willingly operating an establishment that facilitated the sexual exploitation of people, and the sale of dangerous drugs in the community," said Jose Perez, a special agent with the FBI's Phoenix Field Office. "They operated a marketplace for illegal activity steps away from a neighborhood, where children are walking to school every morning. They profited for years while turning a blind and uncaring eye to the families that live in this neighborhood."

Phoenix hotel gets boarded up to relief of neighbors

A troublesome Phoenix hotel was boarded up after a multi-agency investigation to the relief of neighbors who had children report instances of drug deals and prostitution in the area while heading to school. FOX 10's Kenzie Beach has more.

1 person on the indictment has been arrested, and warrants are pending for the others.

"This is not a secret. We all knew what was going on there," said assistant police chief Ed DeCastro of the Phoenix Police Department. "The seizure today of the Royal Inn will be a huge contributor to being able to reduce the crime in that area, since that was a major hub of where a lot of things were happening.

Residents along the area say they are getting their neighborhood back.

"I wouldn't feel safe to have my little girl sitting in here because it was just dangerous," said one neighbor.

Now, the doors and windows of the hotel are boarded up.