Sunday, June 17, 2018
Business

Tarpon Inn accused of price gouging, under paying housekeepers

TARPON SPRINGS — The dated two-story orange hotel near the Sponge Docks has been home to drug busts and nuisance complaints in the past — but now the Tarpon Inn is tangled in a different kind of legal mess.

It’s not the guests accused of breaking the law, but owner Shreya Shah.

The state in an uncommon pursuit of anti-gouging rules is suing the inn, saying it charged 36 guests up to two times its normal rate during Hurricane Irma. In a separate suit, a couple who worked there say they were paid as little as $10 a day to clean the entire 46-room complex.

This isn’t the first time Shah and her late husband, Chetan, have been thrown under a legal spotlight. In 2014, the Shahs’ family squabble with prominent Tampa doctors Kiran and Pallavi Patel turned into a legal battle over the "Bollywood Oscars" event in Tampa. Chetan Shah said his brother-in-law owed him money — while Kiran Patel maintained Shah fraudulently added his name to documents.

But now Shreya Shah, 49 — who has been running the hotel since her husband died a year ago — is named in both a federal and circuit court lawsuits for how she runs the W Tarpon Avenue Inn.

From the archives: Legal drama in Patel family over ‘Bollywood Oscars’ continues

State Attorney General Pam Bondi’s office says the hotel broke price-gouging laws for the second time in two years during Hurricane Irma — meaning the hotel also broke an agreement to never gouge again and could face penalties over $25,000.

The second lawsuit accuses the inn of breaking federal law by paying two employees, at times, less than a $1 an hour. Both cases were filed in late May, just over a week apart.

Ray and April Brown started working at the hotel in June 2017. They were given a room to stay in with their daughter, according to their attorney, Newt Hudson.

The lawsuit, filed in the Middle District of Florida Court, says the couple usually worked 10 to 12 hours a day, seven days a week. They were in charge of cleaning and general maintenance, the lawsuit says. They stayed at the hotel, where rates average around $50 a night, and were each paid $10 a day, according to the lawsuit.

"An employer can give compensation in the form of a hotel room, but it has to be reasonable," Hudson said. "I’m certain that didn’t happen here."

Related coverage: Tarpon Springs police, city leaders and residents partner to stop crime at two motels near Spring Bayou

The Browns, according to the lawsuit, were not paid minimum wage nor did they ever receive time-and-a-half for working more than the 40 hours per week. The couple declined to speak with the Tampa Bay Times through their attorney. They worked for the hotel until March of this year, meaning they were employees at the hotel during this past hurricane season.

It’s then that the State Attorney’s office says Shah hiked up the cost of hotel rooms.

Following Hurricane Matthew in October 2016, the state fined 16 businesses, lessening the penalties if they signed an "assurance of voluntary compliance." Four businesses went to court, including a Clearwater Red Roof Inn and a Tampa Days Inn that were each ordered pay more than $30,000 in penalties and restitutions.

The Tarpon Inn was one of the businesses that made a deal with the state, paying $5,000 in penalties and $1,700 in refunds to guests with the promise not to inflate costs again during a state of emergency. Chetan Shah and his wife signed the agreement with the state two weeks before he died on May 31.

His cause of death is unclear, but Chetan had told the Tampa Bay Times during the Bollywood award show drama that he had issues with his heart that required hospitalization. According to court records, he died while in bankruptcy. His wife was one of his creditors.

When Hurricane Irma struck last fall, Shreya was running the hotel with other family members.

According to the State Attorney’s office filing, from Sept. 8 to Sept. 10 — the hurricane evacuation period — guests paid between $80 and $110 per night for the same rooms that had just cost $55. After the hurricane made landfall, prices went up to $120. They dropped to $51 by Sept. 16.

During Hurricane Matthew, the hotel’s prices went from $73 to as much as $271.

"Our current litigation alleges subsequent violations by the Inn during Hurricane Irma and seeks monetary relief for consumers, statutory penalties for the alleged recent price gouging violations, investigative costs, as well as additional penalties for violating the prior agreement," Bondi’s office said in a statement.

Shreya Shah could not be reached for comment.

On Monday, The Inn was quiet and the parking lot largely empty. A hotel employee told a reporter she was new to the job and didn’t know how to get in touch with Shah or family members who work in the hotel.

Two years ago, the city of Tarpon Springs demanded the hotels in Spring Bayou shape up to detract crime or it would purchase them. The city followed through and bought the Tarpon Inn’s neighbor, Sunbay Motel, at the start of this year.

Chetan Shah told a reporter he bought the hotel in 2014. (That’s around the time his wife lost her family job in pharmaceuticals during the Bollywood feud.) In that 2016 interview, Chetan said he spent $500,000 in hotel updates. He also said he installed 48 cameras that sent livestreams to police following a drug selling bust at the property.

"We have turned this place around completely," Chetan told the Times.

The Browns have asked for a jury trial. The state is still in its proceedings against the hotel. It has fined and settled with 10 other businesses it found had gouged during Irma.

Times researcher Caryn Baird and staff writer Hannah Denham contributed to this report. Contact Sara DiNatale at [email protected] Follow @sara_dinatale.

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