Reno Gazette-Journal from Reno, Nevada • Page 9

Reno Evening Gazette Friday March 17, 1978 -9 Hughes aides indicted on drug charge Bankruptcy court hearing slated for River Inn By EARL BIEDERMAN Federal bankruptcy court officials In Reno have set April 26 for the first meeting of creditors in connection with a petition for reorganization filed Monday by owners of the River Inn resort on the Truckee River. That meeting of creditors holding debts in excess of $2 million will be the second step in the legal process of suspending the resort's debts while its owners try to come up a new financial structure that will allow them to stay in business. Chapter 11 reorganization papers filed Monday In the bankruptcy court reveal that the riverside spa claims assets of $2.9 million against debts totalling $2.1 million. The major component of the resort's debt Is a long- Jewish Memorial service A special service In memory of the 30 persons murdered by terrorists in Israel last weekend will be held at 8 p.m. today at Temple Emmanu-El in Reno.

Rabbi Ernie Nadler said the service Is one of several planned in the western United States. 1 1 is sponsored jointly by the Temple and United Jewish Appeal. The service will be a traditional one, with Erayers and remem-rances dedicated to the dead Israelites. LAS VEGAS AP The closest aide to the late Howard Hughes and Hughes' former personal physician have been Indicted by a federal grand Jury on charges they conspired to illegally supply the millionaire recluse with large amounts of codeine during the last 20 years of his life. The Indictments were returned Thursday against John M.

Holmes and Dr. Norman F. Crane, 72, both of Los Angeles. Each was charged with one count of conspiracy to distribute codeine phosphate and empirln codeine from 1955 through 1974. The Indictment alleged that Crane would write Holmes prescriptions for the drug which Holmes would have filled at a Beverly Hills drugstore and then give to Hughes.

They allegedly supplied Hughes with codeine on about 500 occasions over the 20-year period. Crane, contacted in Los Angeles on Thursday, said, "I have no comment." Hughes, who died April 5, 1976 on an emergency jet flight from his last hideaway at Acapulco, Mexico, to a hospital at Houston, Texas, would either take the codeine orally or Inject himself in the arm, the Indictment said. Holmes, who served 17 years as an aide to Hughes, testified last December at the Mormon will trial here that he had seen Hughes give himself an injection two days before he died of kidney failure. He testified that the drug probably was codeine. The indictments alleged that Crane and Holmes used the names of three other former Hughes aides in the alleged plot.

None of the three were charged, however. Between 1955 and 1963, the indictment charged. Crane wrote codeine prescriptions for Hughes aide Roy Crawford on 36 different occasions. Crawford allegedly had the prescriptions filled at a Los Angeles pharmacy and gave the codeine to Hughes. By 1963, the indictment said, Crawford became worried about the matter and told Crane "he was not going to fill any more prescriptions and did not want Holmes using his But Crane allegedly used Crawford's name for another 55 prescriptions between January 1964 and December 1965, the Indictment said.

Another Hughes aide, George Francom, saw his name on a bottle of codeine and offered to let Crane use his name for the prescriptions at any time, the indictment alleged. The indictments were returned in Las Vegas because Crane allegedly made out 71 prescriptions for codeine in Holmes' name between February 1967 and December 1970. Hughes lived in seclusion on the top floor of his Desert Inn Hotel during that period. The prescriptions were filled in Los Angeles during that period and brought to Las Vegas, the indictment charged. The name of another Hughes aide, Levar Myler, was used for further codeine prescriptions between February 1969 and November 1970, the indictment charged.

Sealy queen size set on sale! in-ai rears munon loan ianen out irom valley Bank in January 1976. The voluntary bankruptcy petition, and a thick court file in Washoe District Court, revealed Thursday that this week's move by the spa's absentee owners is the culmination of efforts by the bank to foreclose on the Inn. The court files indicate that Civic Center Enterprises, an Orange County, California corporation headed by three attorneys, had a loan outstanding from Valley Bank on the River Inn in early 1976. The same three attorneys, under the name of Leisure Time Developments, a Nevada corporation, acquired the $1.3 million loan to refinance their ownership of the spa. About $500,000 of the new loan went back to the bank to pay off the Civic Center Enterprises loan, the files reveal.

The resort was to make monthly payments of $18,000. The resort's owners were to pay off the remaining approximately $700,000 with $18,000 monthly payments over 10 years. But the bank filed suit in January 1977 claiming the loan defaulted almost immediately when the June 1976 payment was missed. Miscellaneous payments were made later, but the bank sought to foreclose on the entire loan. District Judge Grant Bowen presided over a foreclosure triallast year.

In the first week of this year he entered a judgment finding that Civic Center Enterprises and Leisure Time Developments were effectively one and the same. At the same time he ruled that the resort owed the bank $1.5 million in principal and interest. Bowen set Feb. 8, 1978 as the date the resort would be sold by the sheriff in an auction on the courthouse steps. But a Feb.

9 letter in the court file reveals that a Cleveland man, Thomas Lloyd, had come forward to save the resort. In accordance with his plans, the foreclosure sale was postponed on condition Lloyd come up with $240,000. The bankruptcy file shows Lloyd to be the resort's second largest creditor, holding a debt of $165,000. The third largest creditors are identified as two Newport Beach, women with a combined investment of $58,000. Valley Bank Vice-President Mike Furbush said Thursday that the spa's lingering financial troubles have nothing to do with its current general manager Rick Mattson who now faces trial in June on federal fraud charges not connected with the resort.

A longtime Reno resident who is now on probation in connection with a fraud conviction in Colorado, Mattson was hired to take charge at the River Inn last November, almost a year after the foreclosure suit was filed. "I don't think the River Inn's problems should be clouded by mine," Mattson said when contacted Thursday. "There is no connection between the two." $248 Now! A beautiful mattress for a beautiful night's sleep. Hurry! Queen, 2-piece set, reg. 289.95 Sale $248 Twin size, each piece, reg.

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The FBI said indictments were returned in Cleveland Wednesday charging Mr. and Mrs. Jeffrey Rabinowitz with two counts each of violating federal bribery statutes. The indictment says Mrs. Rabinowitz removed "sensitive and confidential reports" from the FBI office and that she and her husband received about $15,900 for the papers.

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