Phoenix Royal Inn motel owner receives five-year federal probation and forfeiture order after FBI-led probe
Federal sentencing closes chapter in long-running Royal Inn case
A federal judge has sentenced the owner of the Royal Inn, a Phoenix motel that investigators described as a persistent site of prostitution and drug activity, to five years of probation and significant financial penalties following a multi-agency investigation involving federal and local authorities.
Varsha Patel, 57, of Chino Hills, California, was sentenced on February 4, 2026, in U.S. District Court in Phoenix. The sentence includes five years of probation, forfeiture of the Royal Inn property, forfeiture of $744,000, and a $5,000 fine. Patel pleaded guilty to using a facility of interstate commerce in aid of racketeering enterprises, a federal offense commonly associated with the Travel Act.
What the investigation alleged about the motel’s operations
Law enforcement activity at the Royal Inn intensified in September 2024, when federal agents executed search and seizure warrants at the property at 2510 W. Palo Verde Drive and the motel was shut down and fenced off. Authorities said the closure was intended to stop ongoing criminal activity that had drawn repeated complaints from nearby residents and businesses and was visible to surrounding institutions, including schools in the area.
In court filings tied to the 2024 federal case, prosecutors alleged that, from 2017 through September 2024, motel operations were sustained by room rentals to people engaged in prostitution and drug dealing, and that proceeds were then used to support the business and a range of other expenses. The 2024 indictment also alleged that police had repeatedly warned the owner and operator about illegal activity on the property and that multiple abatement notices had been served over several years.
Charges filed in 2024, and how the case resolved
The federal grand jury indictment unsealed in September 2024 included counts alleging Travel Act violations, maintaining a drug-involved premises, and promotional money laundering, along with allegations of false statements connected to Small Business Administration loan processes. Patel ultimately resolved the case by pleading guilty to a single Travel Act-related count; the remaining allegations were not part of the conviction reflected in the sentencing disposition.
Defendant: Varsha Patel, 57, Chino Hills, California
Property: Royal Inn, 2510 W. Palo Verde Drive, Phoenix
Sentence: Five years of probation
Financial terms: Forfeiture of the motel, forfeiture of $744,000, and a $5,000 fine
Timeline markers: Indictment unsealed and property seized in September 2024; sentencing imposed February 4, 2026
Enforcement approach: property seizure and forfeiture
The case illustrates a strategy increasingly used by federal and local partners in chronic nuisance-property investigations: combining criminal prosecution with seizure and forfeiture tools to halt operations and remove assets tied to the underlying conduct. In the Royal Inn matter, the immediate closure in 2024 and the forfeiture order imposed at sentencing in 2026 together ensured the property could not continue operating under the same ownership structure.
The Royal Inn has remained closed since the 2024 seizure, with the forfeiture order formalizing the loss of ownership as part of the 2026 sentence.