Former Prosecutor’s Quest to Build Big Casino No Sure Bet : Oxnard: Richard Crane’s partners believe they have an ace in the hole. But he has a few hurdles to clear.

The card club applicant comes with a gold-plated resume as a former federal prosecutor who rooted out criminals in organized gambling, then became a successful casino owner himself.

Richard P. Crane Jr., 53, now a high-priced corporate lawyer and president of the Bel Air Country Club, holds a 77% share of a proposal to build one of the state’s largest card casinos in Oxnard.

That comforts some city officials, who are considering big-time gambling as a tax-rich antidote to Oxnard’s shrinking municipal budget.

And it delights Crane’s local partners, who think they have an early inside track in an increasingly competitive race to build Ventura County’s first large card club.

They believe that Crane, former chief of the U.S. Department of Justice’s Organized Crime Strike Force in Los Angeles, is their ace in the hole--a 10 on the credibility scale.

That is especially true since city officials recently learned that Crane’s main early competitor for an Oxnard gambling permit is a convicted felon.

But as the Oxnard City Council prepares for a June 8 study session on the gambling issue, Crane has his own hurdles to clear:

* He owns all or part of five casinos in Las Vegas and Colorado. State gaming authorities say California generally forbids owners of such clubs from holding licenses here, because those gambling activities are not legal in this state.

* A potential Crane partner in Oxnard is a former real estate syndicator who lost two civil fraud judgments in 1984 worth $3.35 million and was sued in 1988 by 6,000 investors who claimed he defrauded them out of $100 million. The potential partner was also an investor in a Bell Gardens card club seized by the federal government in 1990 because it was built partly with drug money.

Though Nevada gaming authorities and lawyers familiar with Crane’s work in federal court in Los Angeles vouch for his ability and integrity, aspects of his past may prompt inquiry by state gaming officials and Oxnard city officials when they do their background checks.

Crane, once nominated by the Justice Department as the outstanding federal government attorney in the nation, created a stir among prosecutors after resigning his strike force post in 1975 by representing gambling interests and a client associated with organized crime figures, and by gaining a 5% interest in a Las Vegas casino in 1979.

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His reputation as a federal prosecutor was temporarily sullied in the early 1980s when a felon’s claim that Crane had delayed or quashed prosecutions at the behest of criminals received nationwide media coverage. A federal investigation cleared Crane of any wrongdoing.

Crane, in an interview Friday, said he would bring to an Oxnard casino a rare mix of experience--as a prosecutor who convicted criminals involved in Nevada gaming, as an owner and operator of highly successful casinos and as a $300-an-hour attorney who specializes in the complicated business of corporate law.

But perhaps more important, Crane said: “I think that I would pass any integrity test the city wants to impose. . . . I know about myself. I’m very confident of what I represent.”

In a recent conversation with a top California gaming official, Crane said he has already argued that the state would be wise to use its legal discretion and make him the first Nevada licensee to also receive a license here since gambling controls were tightened in 1984.

“I told (the official) that gaming in California is big business and there’s no faster way to get in trouble than to keep a mom-and-pop mentality in the running of these places,” Crane said. “And they would make a mistake not to take advantage of (my) experience.”

Crane said he would personally oversee the $6-million casino he hopes to build along the Ventura Freeway near the Price Club--by working at the casino himself at first, then monitoring activities through facsimile transmissions to his Santa Monica law office.

He is in daily contact with the Barbary Coast and Gold Coast casinos in Las Vegas, in which he owns or controls 5% of the equity, he said. He also owns 100% of the Toll Gate Casino in Central City, an old Colorado mining town that is booming anew because of gambling. He holds small interests in two other casinos in the same area because he put those deals together, Crane said.

“I’ve got a lot of privileged (gambling) licenses to protect,” he said. “And the only way you can guarantee the integrity of these places is to go do it yourself hands on.”

Crane’s group is one of three that have either filed formal applications or have taken out application papers to build a casino in Oxnard, and bring big-time gambling to Ventura County.

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The 50,000-square-foot casino envisioned by two of the groups would rank as the sixth or seventh largest in California, and would produce an estimated $500,000 to $2 million a year in gambling taxes. A casino also would bring $500,000 a year for charities and between 400 and 600 jobs, the applicants said.

Oxnard City Council members are considering casino gambling for the first time because their $60-million budget is expected to shrink by $4 million next fiscal year, and they want to find ways to save services.

When screening applicants, council members say they will place the greatest importance on spotless backgrounds. And recent disclosures have reemphasized the importance of those efforts.

Over the last two weeks, city officials learned that one casino promoter--political consultant Timothy M. Carey of Torrance--was convicted last year of felony lewd conduct with a 12-year-old girl. In addition, a second Los Angeles County businessman who was involved in Carey’s proposal also had participated in an early 1980s hidden-ownership scheme in the city of Bell.

Carey told The Times that he would try to turn his proposal over to an investment group by last Wednesday, but he could not be reached for comment last week on whether he had completed the transaction.

Another promoter also is trying to lure a third group of casino investors--the owners of the state’s second-largest card club--to the county. Gambling industry sources said Oxnard businessman Keith Wintermute is soliciting investments from the highly successful California Commerce Club east of Los Angeles, which had its own corruption problems when first opened in 1983.

Against that backdrop, Crane’s local partners--a group of investors headed by Ventura developers Michael E. Wooten and Frank Marasco--have said they will stress Crane’s experience and integrity.

“Crane brought a real credibility and legitimacy to the project,” said Wooten, who recruited the lawyer as managing partner in December by turning over three-fourths of the deal to him. “We thought the city people would not want to take a chance on someone who was not impeccable.”

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Comments by lawyers and state officials familiar with Crane’s work in Nevada and California indicate that Wooten may have chosen his partner well.

“My relationship with him goes back to the ‘70s. He prosecuted my dad,” said Anthony P. Brooklier, a top criminal attorney whose father, Dominic, served a federal prison term as the one-time chief of the Mafia in Los Angeles.

“I thought he was an extremely capable prosecutor, very honest,” Brooklier said. “I have nothing but the utmost respect for him. He has a wonderful reputation.”

Randall Sayre, chief of investigations for the Nevada Gaming Control Board, said Crane’s two Las Vegas casinos are considered among the best operated in the state. “If there was any adverse information in regards to Crane I would be one of the first to know,” Sayre said. “I’m not aware of any.”

Sig Rogich, a veteran Las Vegas publicist who ran the 1988 advertising campaign for then-President George Bush as a White House aide, said Crane is an “integrity conscious guy. Anything he’s involved in you’d know it’s a straight operation.”

Ventura County Dist. Atty. Michael D. Bradbury, whose office is interviewing casino applicants and checking their histories, said Crane has “an impressive background, a very clean background.”

Bradbury added Friday, however, that “at least one of his friends has peaked our interest.” The district attorney would not elaborate.

But The Times has learned that both Bradbury and state gaming officials are interested in Crane’s business relationship with Richard Traweek, a major Southern California real estate syndicator who raised $120 million from investors in 38 transactions before his empire collapsed in the mid-1980s.

Traweek, 48, has been involved in bankruptcy and civil litigation since 1984, when he lost two awards worth $3.35 million after juries found in favor of real estate agents who alleged that Traweek cheated them out of commissions on properties he bought for his partnerships.

Traweek also was identified in a 1990 federal case in Miami as an original investor in the Bicycle Club in Bell Gardens, which the government seized.

Lawyers for the investors argued that their clients were unaware that an international drug-money laundering operation funneled millions of dollars through the Bicycle Club. None of the investors was charged with a crime, but the government retains a 20% share of the club and is litigating for 16% more.

Crane described Traweek, who could not be reached for comment, as a client and a friend. He said Traweek wants to be a partner in the Oxnard casino.

“But if I think it’s going to hurt, he won’t be involved,” Crane said. “It’s not a decision I have to make right now.”

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According to Crane, Traweek was the victim of his lawyers and accountants in the failed 1980s partnerships. Crane said Traweek recently won a $13-million settlement from his former law firm, which is now in bankruptcy.

“As far as I know Traweek is a fine guy, and I stand by him,” Crane said. “I think he’s been badly served by his professionals.”

Crane said he and Traweek have never been business partners, though federal bankruptcy records show both were involved in negotiations earlier this year to buy a defunct card club in the city of Bell.

A judge approved in March the sale of the casino’s assets to Vantage Capital Corp., which Traweek represented, and to Crane for $2.35 million and debt payments of at least $820,000.

Traweek signed over Vantage’s interest in the deal to Crane, according to Crane, because Crane wanted to be sole owner of the card club. Crane said he killed the deal last month because of problems negotiating a new lease with the casino landlord.

Crane has been involved with the gambling industry since 1970, when as chief of the Western Region’s Organized Crime Strike Force he was responsible for attacking the mob’s hidden interests in some Las Vegas casinos.

By the time he left the strike force in 1975 at age 35, Crane had been a government attorney for 11 years. He said he agonized over resigning, but finally did for personal reasons involving family finances.

The move created resentment among some other prosecutors, since Crane soon represented clients in a Las Vegas industry whose ethical shortcomings he had helped expose.

“During that period there was a certain unfounded bias in the federal government, especially the strike force, in regards to Nevada casino operations,” remembered lawyer Frank Schreck, whose Las Vegas firm represents casinos.

So when Crane accepted clients in the gambling industry and became a casino owner “it was kind of like going to the dark side, you know Darth Vader. They painted everybody with the same brush.”

Once in private practice, Crane worked for a large Los Angeles law firm, specializing in business litigation. He represented a Detroit woman, suspected of organized crime ties, in her successful 1976 bid for a license as part-owner of the Aladdin Hotel in Las Vegas.

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During hearings, Crane maintained that the woman’s financial adviser, a convicted bookmaker, was not an associate of Detroit Mafia members. The man was later found to be secretly running the Aladdin and was banned from Nevada gaming.

Crane also defended a bail bondsman associated with organized crime figures in the early 1980s.

Though he is predominantly a civil corporate lawyer, Crane has defended high-profile clients in criminal cases in recent years, including former Board of Equalization member Paul Carpenter, whose political corruption conviction was overturned on appeal, and former MCA executive Eugene F. Giaquinto, who was suspected of business dealings with organized crime figures but was never charged with a crime.

Today, in the Los Angeles legal community, Crane is known for both his ability and price tag.

“Crane represents a lot of heavyweights, a lot of establishment people in town,” said Pasadena attorney Marvin Rudnick, who was himself a strike force prosecutor in the 1980s.

Criminal lawyer Stanley Greenberg, who has known Crane since both were federal attorneys, quipped: “Every once in awhile, in the legal community, you’ll hear someone say, ‘Hey, this is a nice case, it’s almost in Dick Crane’s range.’ ”

Crane said he still spends a lot of time on his law practice, despite his casino activities and his management of a Las Vegas culinary union pension fund, which he said is recognized as one of the best-run in the country by federal regulators.

An Oxnard casino would take additional time, he said. But he said his group’s demographic studies show that enough players would come to make the club a success.

If city officials become concerned about who else might be involved, Crane said, he would arrange for the $6 million to $8 million in financing himself.

“I’ve got about five different possibilities bouncing around in my mind on how I would structure this,” he said. “But I think initially I would just go in myself.”