Two Rockford Hotels Are Closed After a Drug Raid

By: Jason Lanning
By: Jason Lanning

23 News has been investigating Rockford Motel and Six Penny Inn for the past month and a half. During the investigation, 23 News obtained hundreds of pages of documents, all of it pointing to tax fraud. In addition, more than a thousand police calls and owners that are trying to hide from it all.

Dog feeces on the floor, rooms in disarray and drug dealers and prostitutes being asked to leave. This was what was found inside the rooms Friday afternoon at Six Penny Inn and Rockford Motel after the city of Rockford announced it is closing down the facilities.

Between 1997 and 1999, hotel owners Mahabulbul and Nilufar Kabir we're charged with 48 counts of tax fraud and violation of the federal tax act. This resulted in more than $50,000 in fines. The Kabir's hotels are owned under a land trust agreement with Bank of Waukeegan. It's an agreement that adds an extra layer of protection against lawsuits and investigations.

According to a source inside the security firm that polices the properties, business owner James David Reed may have been taking money and drug payoffs to protect drug dealers. When confronted Reed had no comment to make.

23 News has been doing undercover camera investigations, tax research, and code violation research. We will continue to follow this story.

What a Land Trust Agreement Has to Do With Two Motels Shutting Down

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