As the capricious and supremely autocratic ruler of a business empire worth billions, Howard Hughes has spent almost as much time and trouble fighting legal problems as the germs about which he constantly worries. In 1973, after a twelve-year court fight, he finally upset a $180 million judgment against him for allegedly mismanaging TWA, and he is currently being sued by his former chief lieutenant, Robert Maheu, for $17 million on grounds of libel.
Last week Hughes faced his first criminal charge. Along with four present or former business associates, including Maheu, Hughes was indicted by a federal grand jury in Las Vegas on charges of perpetrating a stock swindle.
Judge Roger D. Foley ordered the defendants arraigned next week. Because he has extensive business dealings with the Government, which could be endangered if he repeatedly ignores court orders, Hughes eventually may feel obliged to show up in court. But the chances that he will appear for arraignment are roughly equal to those for breaking the bank at one of his gambling casinos in Vegas. For the phantom of hotel penthouses, it was time for another secret move to another set of $1,000-per-day quarters.
Seven days before the indictment was handed down, Hughes and a party of ten roared out of London, where he had lived at the Inn on the Park for nearly a year, and flew by private jet to Freeport, on Grand Bahama Island. Arriving at 4 a.m., the entourage moved into four top-floor suites of the Xanadu Princess Hotel. Among its attractions is that it is in a country that recently refused to extradite Financier Robert Vesco to the U.S. to stand trial on an indictment for using telegraph services to carry out a fraud—one of the violations that Hughes is now charged with.
The case centers on Hughes' campaign to acquire Air West Inc. (since renamed Hughes Air West), a line serving eight Western states and parts of Mexico and Canada. The Government charged that Hughes and associates conspired to manipulate the price of the company's stock up and down by, among many other things, flooding the market with large holdings in an illegal effort to scare its directors to terms. Hughes was charged with seven violations carrying a maximum prison sentence of 28 years and $34,000 in fines.
Besides Hughes and Maheu, who was ousted in an epic power struggle three years ago, those indicted were: Chester Davis, Hughes' longtime No. 1 attorney and chief counsel of Summa Corp., the umbrella organization that holds the casinos, Hughes Air West, Hughes Aircraft Co. and nearly all of Hughes' other properties.
David B. Charnay, president of Four-Star International Inc., of Beverly Hills, a television production company; he became acquainted with Hughes when the billionaire was expanding his television network in the late '60s.
James H. (Herb) Nail, a Hughes official in charge of land acquisition.
Named as co-conspirators but not indicted were Herman (Hank) Greenspun, publisher of the Las Vegas Sun and a longtime Hughes booster; and George Crockett, an old Hughes friend.