Inn’s owner entangled in RICO suit

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SANDPOINT — The company which owns Sandpoint’s Quality Inn is at the center of a familial tug of war over a business empire worth as much as $300 million, according to a federal lawsuit pending in the central district of California.

The bruising legal battle between brothers Govind and Prashant Vaghashia broke out on March, according to U.S. District Court records.

Counsel for Govind Vaghashia alleges his younger brother engaged in organized crime by siphoning money from two Quality Inns he owns in California to bankroll secretive investments in remote locations to avoid detection. Counsel for Prashant Vaghashia counters that those investments were part of their shared vision to grow the business empire.

The brothers accuse each other of misappropriating partnership funds and assets, court documents indicate.

The suit accuses Prashant Vaghashia of violating the Racketeer Influenced and Corrupt Organization Act by turning over only partial cash receipts from the Quality Inns he managed in Burbank and Camarillo. Those funds were allegedly shifted across state lines to purchase motels and restaurants in Idaho and Arkansas, according to the civil complaint.

“Together, the defendants played ongoing, interrelated, and interdependent roles in embezzling, transporting, and laundering the stream of embezzled funds by directing that they be used to operate the businesses, and by so doing establish a ‘clean’ source for the fruits of the fraudulent scheme so such funds could be distributed among its participants,” the plaintiffs’ attorneys said in the 40-page complaint.

Prashant Vaghashia is a defendant, as is Pioneer Hotel Group, the company which purchased Sandpoint’s Quality Inn in 2018. The lawsuit makes no reference to Sandpoint, although it alleges Pioneer Hotel Group’s acquisition of the Castle Rock Steakhouse and the Wyndham Garden Hotel in Boise were accomplished using funds embezzled from the partnership Govind Vaghashia presides over, court documents say.

Prashant Vaghashia and his alleged accomplices are accused of squirreling away $365,934 in cash, making $399,851 in unauthorized charges, and unlawfully depositing $42,840 worth of checks. All told, the defendants are accused is misappropriating more than $808,000 from the partnership.

Counsel for Prashant Vaghashia contends the brothers are embroiled in a disagreement over business-succession issues which are already the subject of a half-dozen lawsuits pending in California state court.

“This case involves a family feud that has gone unnecessarily thermonuclear, with plaintiffs’ lawyers pushing many of the buttons,” M. Cris Armenta and Credence Sol said in court documents.

Attorneys for Prashant Vaghashia say the brothers partnered to form a business empire of shopping plazas and hotels worth an estimated $300 million. The partnership was harmonious until 2017, when a clash erupted over ownership of assets.

The older brother laid claim to all of the partnership’s assets and ultimately viewed his younger brother as a mere employee, according to Prashant Vaghashia’s counsels. They also accuse Govind Vaghashia of fraudulently conveying partnership assets and depleting partnership funds.

Counsel for Prashant Vaghashia disputes the RICO claims and contends the acquisitions were consistent with the overall partnership plan to expand the business. Funds alleged to be ill-gotten, meanwhile, were used for maintenance and operations of the assets.

Prashant Vaghashia’s attorneys are moving to have the suit stayed or dismissed because the matters at issue in the federal litigation are already the subject of pending state court litigation, court records indicate.

The motion is pending.

Keith Kinnaird can be reached by email at and follow him on Twitter @KeithDailyBee.

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