After years of neighborhood complaints and frequent police calls, a federal judge in Phoenix ordered the owner of the Royal Inn to forfeit the motel and related cash after prosecutors said it had become a hub for prostitution and drug dealing that harmed the area. Following a multiyear investigation, the owner was sentenced to probation and forfeiture instead of prison.
Varsha Patel, 57, of Chino Hills, California, was sentenced on Feb. 4 by U.S. District Judge Susan M. Brnovich to five years of probation. She was ordered to surrender the Royal Inn, give up $744,000 in cash, and pay a $5,000 fine after pleading guilty to “Using a Facility of Interstate Commerce in Aid of Racketeering Enterprises,” according to the U.S. Attorney’s Office.
Court records reviewed in reporting show Patel ran the Royal Inn through Sarang Hospitality LLC from 2017 through September 2024 and funneled motel proceeds into the motel mortgage, a Chino Hills home mortgage, life insurance policies, and daily expenses. Local filings also detail a long history of calls for service at the property. Police told Patel in May 2019 there had been roughly 200 calls since January 2017, and officers logged about 177 calls in the first six months of 2023, as reported by AZ Family.
How investigators say the motel operated
Federal prosecutors say the motel’s management knowingly rented rooms to people involved in prostitution and drug dealing and put rules in place to minimize detection, including directions on where sex workers should park, how to attract customers offsite, and a practice of not requiring credit-card or ID information. The indictment also named the motel manager, Nilam Patel, and four other defendants who were charged with distributing fentanyl and methamphetamine at the property. Agents executed a search warrant in September 2024, and the U.S. Marshals Service later shuttered and fenced off the premises, according to the U.S. Attorney’s Office.
Law enforcement response and neighborhood impact
Federal and local leaders praised the investigation and the seizure as a win for neighborhood safety. “When federal and local law enforcement team up it’s a force multiplier,” U.S. Attorney Timothy Courchaine said. FBI Phoenix Special Agent in Charge Heith Janke called the operation a response to a business that “essentially operated a marketplace of illicit activity,” as reported by AZ Family.
Legal backdrop and what’s next
The offense Patel pleaded guilty to, using a facility of interstate commerce in aid of racketeering enterprises, is covered by the Travel Act (18 U.S.C. § 1952), which for certain violations carries a maximum sentence of five years and a $250,000 fine under federal law. With the Royal Inn forfeited and cash ordered turned over, local officials say the case removes a persistent source of crime from the block and leaves the property’s future to be sorted out by law enforcement and the courts. The prosecution was handled by the U.S. Attorney’s Office in Phoenix and is listed under case number CR-24-01529-001-PHX-SMB, per court records and federal filings, according to GovRegs.
