The deal was announced by Paul Fitzpatrick, senior managing director of Insignia/ESG Hotel Partners of New York City, who oversaw the marketing and disposition of the complex. The seller was UBS, AG.

The award-winning castle property, which sits on 10.1 acres, features a total of 31 luxury hotel rooms, including 24 rooms and suites in the separate Carrollcliffe wing, a pool complex, dining room, 4,200 sf of conference facilities, a health club and a 95-seat Equus restaurant.

Insignia's Fitzpatrick, who said the property attracted a great deal of investor interest, says, "The Castle's grounds and Hudson River views are unique for a hospitality property in the suburban New York City market." He adds that the acquisition is the first hotel venture for Elite Hotels, which plans to open other boutique-oriented hotels in the future.

The sale closes perhaps the final chapter on what has been a scandalous number of years for the property.

Back in 1994, Hanspeter Walder, purchased the property for about $2 million and spent millions of dollars upgrading the property into a luxury hotel complex. Walder, a private banker with UBS, was arrested in 2001 and later convicted on defrauding UBS investors of about $70 million. UBS, AG eventually took ownership of the complex.

The property's roots date back to the turn of the 20th Century, when General Howard Carroll purchased the land and worked with prominent New York architect Henry Kilburn to build a home for his family. Carroll and his wife figured prominently in Westchester and New York City society, hosting foreign dignitaries, ambassadors, politicians and major entertainers of the day, Insignia officials note.

The property was sold in 1941 to Emerson and Ruth Axe, who converted the castle into the headquarters of their investment-counseling firm, which was years later acquired and moved to White Plains. In 1994, Walder acquired the Castle at Tarrytown and completely gutted and renovated the property and re-opened it as a luxury inn affiliated with Relais & Chateaux in 1996. The Carrollcliffe wing opened in 1997 and construction was completed in 2000 on the new pool complex, expanded kitchen and dining room and health club.