Mar. 24, 2009 --Erie County government has sued a Summit Township motel and its general manager for failing to turn over more than $200,000 in county hotel taxes since 2005.

Erie County District Attorney Brad Foulk told the Erie Times-News on Monday he is looking into the case as well, but has not made a decision on whether to file criminal charges in the matter.

The county claims that Maha Laxmi Inc., which does business as the Travelodge, 6101 Wattsburg Road in Summit Township, and its general manager, Minesh Patel, owe the county more than $231,000 in motel tax remittances and accrued interest, according to Erie lawyer Norman A. "Buddy" Stark, who represents county government in the lawsuit.

The county wants to recoup that amount plus an unspecified amount for reimbursement of attorney's fees, according to the lawsuit filed in Erie County Common Pleas Court.

This is the first time the county has filed suit against a local hotel over the tax, county officials said.

Two Erie lawyers representing Patel in the case, David J. Rhodes and Gene Placidi, declined to comment on the case, including why Maha Laxmi and Patel have not remitted hotel taxes to the county.

Stark said in an interview that Placidi has told county officials that Patel used the unremitted hotel tax money to make unspecified "improvements" to the Travelodge.

"The county has been dealing with this guy for over a year," Stark said. "He had been talking about trying to make payment arrangements. ... It got to the point where (the county) could not accept this."

Patel did not return calls left at the Travelodge over several days seeking comment.

The lawsuit centers around the 5 percent tax that Erie County hotels are required to charge their visitors. Erie County Council approved the tax, which went into effect May 1, 2001.

More than $16.7 million in county hotel taxes, and related interest, have been collected by Erie County government since the tax took effect, said Sue Ellen Pasquale, the county's manager of general accounting.

Nearly all of the tax supports the Erie County Convention Center Authority, which operates the Tullio Arena, Bayfront Convention Center and other facilities; and VisitErie, Erie County's tourism promotion agency.

The county claims in its lawsuit that Maha Laxmi and Patel "have collected, but have failed to timely remit the Hotel Room Rental Tax to Erie County" as required by law.

"Travelodge and Minesh Patel have a fiduciary duty to remit the Hotel Room Rental Tax, as a tax collector would do under the Pennsylvania Local Tax Collection Law," the county argues in court papers.

Both Stark and James Sparber, the county's finance director, said that Maha Laxmi and Patel's delinquent payments date back to 2005.

Stark said in an interview that the county stepped up efforts to collect the tax from Maha Laxmi and Patel more than a year ago.

When asked why county government did not go after the late tax payments before that, Stark said: "I don't know how to answer that."

Stark also confirmed that he and other county officials, including Director of Administration Sean Wiley, met with Foulk last week to discuss possible criminal charges against Patel for failure to make required disposition of funds -- even though the civil suit had already been filed.

Asked why the county would seek to file criminal charges after already initiating a civil lawsuit in an attempt to collect delinquent hotel taxes, Stark said: "because it's a crime. When you know there's a crime, you report it."

Wiley could not be reached for comment.

Foulk confirmed meeting with Stark, Wiley, Sparber and County Solicitor Wally Knox about the issue on March 17. Foulk said they discussed the civil lawsuit and possible criminal charges, and he told them "we would staff it to see if this is something (the District Attorney's Office) wants to consider prosecuting."

The civil lawsuit's existence, Foulk said, is one of the factors his office will consider before deciding whether any criminal charges would be filed in the matter.

Foulk said, though, that it is not common practice for his office to get involved in pending civil court cases.

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