Police: Denver condemns Days Inn for prostitution, drug activity, gang activity, electrical issues

DENVER - A Denver Days Inn was condemned and closed Wednesday after what authorities called repeated violations.

"Denver Police, the City Attorney's Office Neighborhood Prosecution Team along with other city agencies said they found instances of prostitution, drugs and gang activity, as well as problems with the electrical system," officials said.

7NEWS reporter Lindsey Sablan talked to Denver Police Cmdr. Paul Pazen, who oversaw the raid. He said the hotel at 620 Federal Blvd. has a history of public nuisance complaints dating back 17 years. Pazen is responsible for District 1, which is where the motel is located.

"We average about 317 calls for service [at the hotel], these are 911 calls or on-site violations, per year. So almost once a day we're at this hotel for some sort of crime issue," Pazen said.

Pazen said the city has made repeated efforts to get the owner to make improvements, but he did not. The department said this isn't the only hotel they've been watching in the city. Police wouldn't disclose other problem hotels, but said they've been watching dilapidated hotels that attract criminal activity and will raid those in the future if owners don't comply.

"These types of operations we want to again get compliance with property owners....to make sure they're not running a place that serves as a crime magnet," Pazen said.

Twelve people were arrested at the hotel. Five of those were for felony warrants and they confiscated one handgun during the raid.

Police said 139 people at the hotel were transported to other hotels.

7NEWS found the owner of the Days Inn, Bruce Rahmani, owns at least four other Denver-metro area hotels. We found a lawsuit filed against Rahmani, filed in January of last year, citing a bed bug attack at the Ramada Denver Midtown.

According to the lawsuit, Rahmani said, "This is a cheap hotel. We cannot afford to pay guests for claimed bedbug attacks." 

Rahmani has not been charged in connection with the shutdown of the Days Inn.

But in 2011, Internal Revenue Service agents seized an estimated $430,000 from a dozen bank accounts in metro Denver controlled by Rahmani, according to court records.

IRS agents accused Rahmani of unlawfully making cash deposits of less than $10,000 in an attempt avoid a transaction of more than $10,000, which requires banks to file a customer "Currency Transaction Report" with the IRS, court records state.

It is unlawful to "structure" bank transactions, often by making multiple daily deposits to different bank accounts to dodge bank reporting laws. The practice is known as "structuring" or "smurfing."

According to court records, Rahmani often made several deposits in a business day, each deposit under $10,000, but they all totaled more than the $10,000 reporting threshold, court records state. He would drive to several different Denver-area banks or branches, often on Sunday night, and make cash deposits in the "night drop" box.

The IRS said Rahmani structured a total of $894,826 in deposits between July 4, 2010, and June 5, 2011, court records state.  

In a June 2011 seizure warrant affidavit, the IRS said it had no knowledge that "the structured money is from an illegal source or that the structuring occurred to conceal a tax crime."

But the IRS laid out a pattern of Rahmani committing structuring violations and a federal judge granted a warrant for agents to seize the money in the motel owner's bank accounts under a civil forfeiture law.

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