The Hottest Show in Hollywood

By NANCY GIBBS

The Beverly Hills police department must dread having to haul local teenage millionaires off to jail for a grisly crime: the tabloids swarm, the rumors fly, the suspects hire the best defense lawyers money can buy -- and all those involved (even the minor players) act as if they are characters in the first draft of a convoluted screenplay desperately in need of a rewrite. Thus it has been several miserable months for the prosecutors in charge of the Menendez murder investigation; they are fielding two young millionaires, charges of patricide, disputed psychotherapy records and flamboyant defense attorneys claiming that vital evidence is inadmissible. And now the key witnesses are behaving like fruitcakes before the trial even begins.

The savagery of the crime and the stature of the victims guaranteed headlines from the start. Jose Menendez, a successful video mogul who ran Live Entertainment Inc., and his wife Kitty were found dead in the TV room of their Beverly Hills mansion last year, their faces blown off and bodies mangled by 14 blasts from two 12-gauge shotguns. But the story didn't make the cover of PEOPLE until seven months later, when the suspects were finally arrested. They turned out to be not a couple of Mob gunmen, as first thought, but the Menendezes' swaggering sons: Lyle, 22, who left Princeton after being caught cheating; and Erik, 19, a writer of poems and screenplays who tried unsuccessfully to make it as a pro tennis player.

The boys sit in a county jail not far from skid row, tans fading, while their lawyers battle over whether prosecutors can introduce tapes or notes of confidential conversations between the Menendez boys and their psychotherapist. A lower court ruled the tapes were admissible, but the California Supreme Court stayed the decision and is expected to issue its ruling next month. So far, crime fans and predatory screenwriters waiting to learn how the story ends have had to content themselves with a steamy drama playing outside the courtroom, as the details emerge about how police knew to look for those tapes in the first place.

It turns out that investigators never really believed the Mob rubout story, on one hand: the murder was too messy, and hit men rarely kill the wife of their target. On the other hand, if the brothers' greed was the motive, they would have had to kill both parents to inherit their $14 million estate. Other pieces soon fell into place: investigators found a screenplay that Erik wrote about a young man who murders his very rich parents for their money. A home- computer disk thought to contain the father's revised will was mysteriously erased. Far from appearing crushed with grief, after the slayings the boys set off on a $700,000 shopping spree.

But none of this was conclusive -- not even the shotgun shell casing found in Lyle's jacket -- until a mysterious witness emerged. An informant told police that psychotherapist Jerome Oziel had tapes and notes of his sessions with the Menendez boys in which they confessed to the crime. The informant added that she overheard the confessions from the doctor's waiting room. Police seized the tapes and arrested Lyle; three days later, Erik turned himself in.

For months after the stunning arrest, stories circulated about the relationship between Oziel and the police informant. She turns out to be Judalon Smyth, his alleged onetime lover and sometime patient, who published a newsletter for doll collectors and produces audiocassettes like Insights into the Sensuality and Sexuality of the Aquarius Woman. Her steamy story was laid out this month in Vanity Fair by reporter Dominick Dunne; in the article she explains that Oziel hypnotized her over the phone into falling in love with him. Two weeks ago she filed a lawsuit charging that Oziel drugged and raped her and later forced her to eavesdrop on his session with the Menendez boys so she could call the police in case they grew violent.

Oziel did what any local celebrity would do: he called a press conference. Protesting that he was bound by professional ethics not to discuss the case, he proceeded to lash out at Smyth for making "totally false, bizarre and defamatory allegations." He did not deny that Smyth was his lover but insisted that she was never his patient and added that she could not have eavesdropped on any confessions because of the layout of his office. None of that explained why shortly after those sessions, he allowed Smyth to move into his home (with his wife and daughters) to calm her fears of retribution from the Menendez boys.

In this drama all the characters have their dark side. Oziel was put on probation in 1986 with the state board of psychology for having a patient do construction work, including installation of a hot tub, at his home in lieu of % payments. Smyth's charges against him are far more serious: assault and battery, medical malpractice, unlawful sexual contact, among others. Oziel refuses to discuss particulars, saying only that Smyth had used "my concern and my wife's concern for all our safety to force herself further into my life and that of my family. By means which I am unable to discuss at this time, she held us hostage."

The only relief in sight is that this sideshow will soon be overshadowed by the main event. On Oct. 22 the state will outline its case for the judge. At the last hearing the visitors' gallery was packed. Soon it will be the hottest ticket in town, and half the town should be speculating about who should play the various characters when the movie is made. Sean Penn as Lyle? Rob Lowe as Erik? But who should play Judalon Smyth and Oziel?

With reporting by Edwin M. Reingold/Los Angeles