The estate of a late businessman is liable for more than $4 million in back taxes on a Manhattan strip club, despite his survivors’ argument that the club was so beholden to organized crime that it was unmanageable, a state tax panel has ruled.

The Tax Appeals Tribunal reversed a finding by Administrative Law Judge Winifred M. Maloney that allowed the estate of Frank A. Marchello to claim an exception to paying the tax bill because Mr. Marchello was “thwarted by others in carrying out his corporate duties” as owner of the V.I.P. Club “through no fault of his own” (NYLJ, Dec. 10, 2009).

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