Leona Helmsley, hotelier and tax cheat, dies aged 87

Leona Helmsley, the glamorous New York hotelier who came to symbolise the excesses of the 1980s and was then jailed as a tax cheat died yesterday aged 87.

Pilloried as Manhattan's very own "queen of mean", who famously said to an employee, "We don't pay taxes. Only the little people pay taxes," she spent the last years of her live feverishly giving away money in an attempt to restore her reputation.

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Known to her employees as a tyrannical, hot-tempered boss from hell - they had an alarm system to warn of her unannounced hotel inspections - she brilliantly turned this into a marketing advantage.

Magazine ads showed a glamorous Leona Helmsley smiling in a gown and tiara noting that the Helmsley Palace was the world's only hotel "Where the queen stands guard". Occupancy rates soared at the Helmsley chain of hotels and she and her husband Harry were soon among the wealthiest people in America. Together they created a real estate empire worth $5bn, which included the Empire State Building, the Park Lane hotel and variously Helmsley branded hotels.

The couple travelled the world in a private jet equipped with its own bedroom suite. They lived in a penthouse overlooking Central Park, with its own pool; a Connecticut estate, a Miami Beach house and a mountain retreat.

The girl from Brooklyn, who started out as a teenage model and estate agent's secretary, had already made her millions selling condominiums when she teamed up with Harry Helmsley in the 1970s. Together they went on a buying spree and soon dominated the city's hotel industry.

When Harry Helmsley lit up the Empire State Building in red, white and blue on 4 July 1976, some mistook it as a tribute not to the US Bicentennial. It was a present to his wife on her birthday he said, and cost him $100,000 - "less than a necklace". But it was New York's "little people" who finally proved her undoing. Tip offs from disgruntled workers that she was not paying her taxes made their way to Rudolf Giuliani, then the ambitious US attorney for New York.

She and her husband were charged with multiple counts of tax evasion, totalling $1.2m, and she was quickly convicted and sentenced to four years in prison. She was also ordered to serve 750 hours of community service and pay $7m in fines.

The trial became a tabloid a sensation amid testimony of her terrorising everyone from her gardeners to hotel executives. She denied that she had every bragged about not paying taxes, but the words dogged her for the rest of her life. She was also accused of underpaying the contractors who installed the gold taps in her marble-clad bathroom and for billing renovations to her home as tax deductions on her businesses.

Harry Helmsley was deemed too mentally frail for trial and when he died in 1997 aged 87, she said: "My fairy tale is over. I lived a magical life with Harry."