In a sweeping indictment that reads like an unfinished Hollywood screenplay, onetime private investigator Anthony Pellicano and six others were accused Monday of conspiring to wiretap, blackmail and intimidate dozens of celebrities and business executives, including actor Sylvester Stallone, comic Garry Shandling and real estate developer Robert McGuire.
The 110-count federal indictment outlines a complicated web of payoffs to police, high-tech eavesdropping and other skulduggery. Prosecutors allege that Pellicano scoured confidential communications and law enforcement databases for scandalous details that would scare off lawsuits or provide his clients with the upper hand in courtroom battles.
FOR THE RECORD:
Pellicano case —An article in Tuesday's Section A about the indictment of former private investigator Anthony Pellicano misspelled the last name of Robert Maguire -- a real estate developer who was allegedly wiretapped -- as McGuire.
The charges are conspicuously silent on what embarrassing information Pellicano might have obtained, how he used it or who paid for it.
Yet the case, which so far has swept up a total of 10 defendants, and riveted Los Angeles' legal and entertainment communities, is far from over. Although no lawyers or marquee Hollywood celebrities were named, the indictment alleges that Pellicano and his clients used the information to secure "a tactical advantage in litigation by learning their opponents' plans, strategies, perceived strengths and weaknesses, settlement positions and other confidential information."
"We are not going to stop until we have discovered all of the illegal activities that [Pellicano] participated in," said J. Stephen Tidwell, assistant director in charge of the FBI's Los Angeles office.
Pellicano, ex-LAPD Sgt. Mark Arneson and Rayford Earl Turner, a former employee of SBC and Pacific Bell, were charged with repeatedly violating the federal Racketeer Influenced and Corrupt Organizations Act by establishing a criminal "enterprise" that benefited Pellicano's once-thriving private-eye business.
The indictment describes Pellicano as the conspiracy's organizer and leader and charges that the trio used wiretaps, protected computers, bribery, identity theft and obstruction to further the Hollywood private eye's reputation and ongoing relationship with "lucrative clients, including entertainment celebrities and executives, attorneys and law firms."
In a court appearance Monday, Pellicano pleaded not guilty and was held without bail after a federal prosecutor alleged he was issuing threats from prison against potential witnesses. His lawyer denied the allegation.
Kevin Kachikian, 41, of Fountain Valley, was charged with developing the wiretapping software — dubbed Telesleuth — used by Pellicano. Three others — Robert Pfeifer, 50, of Hollywood and brothers Daniel and Abner Nicherie of Las Vegas — were charged with involvement in specific instances of aiding and abetting wiretapping.
Arneson, Turner and Kachikian were to enter pleas Monday.
Pfeifer, a onetime music industry executive, allegedly hired Pellicano to eavesdrop on a former girlfriend. Pfeifer was also accused of witness intimidation. His attorney denied the charges.
The Nicheries were alleged to have benefited when Pellicano allegedly wiretapped an opponent in their business litigation. Their court appearance was being handled in Las Vegas.
"The charges allege a disturbing pattern of criminal conduct in which money flowed freely to encourage sworn law enforcement officers to violate their oaths to uphold the law, and to provide the means for Pellicano and his associates to violate the rights of other individuals " Acting U.S. Atty. George Cardona said at a news conference to announce the charges.
The 60-page indictment names scores of alleged victims of Pellicano and the others who, in Cardona's words, "reasonably expected to conduct their lives without their private information sold for profit, and their private communications intercepted by illegal wiretaps."
Nearly a dozen people — among them actors Stallone and Keith Carradine, film producer Vincent Bo Zenga and former Los Angeles Times reporter Anita Busch — were allegedly the victims of wiretaps conducted by Pellicano and the others between August 2000 and November 2002, the indictment alleges.
It was a threat in 2002 against Busch that led the FBI to raid Pellicano's Sunset Strip offices and launch the wiretapping investigation.
Additionally, authorities cited nearly 100 other instances in which Pellicano and Arneson allegedly accessed confidential law enforcement records, including the FBI's National Crime Information Center database, to gain information about targets including Shandling, former "Saturday Night Live" star Kevin Nealon, McGuire and dozens of others. According to the indictment, Pellicano paid Arneson at least $189,000 between 1997 and 2002.
Turner, authorities allege, was paid at least $36,000 from 1997 to 2002 to provide Pellicano with confidential telephone information about dozens of people.
Another SBC employee, Teresa Wright, provided confidential and proprietary information on telephone company subscribers, according to the U.S. attorney's office. While not charged in the racketeering case, Wright has pleaded guilty in a separate prosecution, authorities said.
Sandra Will Carradine, an ex-client and girlfriend of Pellicano, earlier pleaded guilty to lying about Pellicano's alleged wiretapping.
The list of alleged victims provides a link between Pellicano and the Century City law firm of Greenburg, Glusker, Fields, Claman, Machtinger and Kinsella. Almost two years ago, the firm's lawyer, Bert Fields, acknowledged that he had been notified by authorities that he was a "subject" of their investigation.
Three weeks ago, former Beverly Hills Police Officer Craig Stevens pleaded guilty to federal charges of illegally accessing government computers to help Pellicano gather information about a onetime Hollywood producer who was sued by a Greenburg, Glusker client.
Fields, his attorney and an attorney for the firm have repeatedly denied any wrongdoing in connection with the Pellicano case.
Several of the alleged victims had links to former top Hollywood agent Michael Ovitz, although the indictment does not mention him by name.
Creative Artists Agency executives Bryan Lourd and Kevin Huvane, who had background checks performed on them, were groomed by Ovitz as agents but later had a bitter falling-out with him after he departed the agency.
Former New York Times Hollywood correspondent Bernard Weinraub and Busch had been writing about the problems of Ovitz's Artists Management Group around the time that checks were done on them. A former employee of Ovitz's company, Arthur Bernier, also had a check done on him.
"Mr. Ovtiz has fully cooperated with the authorities and answered all their questions," said Ovitz lawyer James Ellis. "We have been following this closely since he went in to answer the questions a couple of years ago."
Transferred to federal custody last Friday, Pellicano was one day shy of completing a 30-month sentence for illegal possession of explosives when he was taken into custody on the new charges issued by the grand jury.
His trademark tailored suits replaced by a standard-issue prison jumpsuit, the 61-year-old Pellicano looked gaunt and somber during two appearances before U.S. District Judge Stephen J. Hillman.
At an afternoon hearing, Assistant U.S. Atty. Daniel Saunders alleged that the private investigator had asked his girlfriend last month to track down his co-defendant in the explosives case, Alexander Proctor. "If something happens to Proctor, he couldn't testify against me," Saunders quoted Pellicano telling the girlfriend.
The prosecutor also referred to "specific threats" Pellicano made to former clients that he would "do away with their opponents."
One alleged threat was aimed at a Los Angeles County deputy district attorney who had handled a case involving one of the Pellicano's clients, John Gordon Jones.
Pellicano's lawyer, Steven Gruel, argued that his client was not a flight risk and that during the previous explosives case, Pellicano had complied with all government requests before surrendering to authorities.
Gruel said that the government never charged his client in relation to any of those supposed threats. He said the accusations were part of an "ongoing pattern" by the government to concoct "some sort of pressure cooker to get Mr. Pellicano to do something he doesn't want to."
Hillman, noting that Pellicano now faces far more serious charges, ordered him held without bail. Authorities said Pellicano could face a sentence of hundreds of years in prison if convicted on all counts.
Loyola law professor Laurie Levenson said the shock waves from the case could be "enormous." Although the government might not be able to charge some people criminally, information produced in the investigation could provide ammunition for future civil litigation against lawyers and other individuals who utilized Pellicano's services.
"It's a celebrity case without celebrity defendants. If this is the tip, it is a very big iceberg," Levenson said.
Contributing to this report were Times staff writers Henry Weinstein, Chuck Philips and Peter Y. Hong.Copyright © 2015, The Baltimore Sun