Many of Pellicano's Recordings Still Secret

Hundreds of the private eye's tapes have not been decoded, U.S. lawyers say. Defense says feds are withholding evidence.

By Greg Krikorian
Times Staff Writer

June 13, 2006

Federal prosecutors said Monday that they were still trying to unravel more than 275 encrypted recordings made by Hollywood private eye Anthony Pellicano.

Although the exact nature of the contents of the tapes will only be known if government cryptographers successfully break the powerful encryption software that Pellicano used to scramble the conversations, they could provide new evidence in the case against Pellicano and his six co-defendants or other Pellicano clients and associates not yet indicted.

Prosecutors disclosed the existence of the still-encrypted recordings at the outset of an acrimonious hearing before U.S. District Judge Dale S. Fischer as they clashed with defense attorneys who alleged the government was intentionally withholding evidence that might exonerate their clients.

Assistant U.S. Atty. Kevin Lally told the crowded courtroom that authorities recovered about 1,300 audio files from Pellicano's offices and have turned over 367 of them to defense lawyers. As many as 400 other Pellicano recordings are considered privileged communications, primarily between Pellicano and his attorneys, and are not part of the case. About 250 recordings relate to the government's ongoing probe but are not relevant to any of the named defendants, Lally said.

That leaves just over 275 recordings that have yet to be decoded. Commercially available encryption software enables computer users to protect digital information using mathematical formulas, or algorithms, that require powerful computers to break.

In addition to the recordings that have been turned over to defense attorneys, Lally said the government has to date turned over 100,000 additional pages of documents in the case.

Lally's statement triggered a sharp reaction from defense attorneys, who suggested that authorities are purposely dragging their feet. "It is clear we have a major problem," said attorney Chad Hummel, who represents Mark Arneson, a former Los Angeles Police Department sergeant accused of participating in Pellicano's alleged conspiracy to wiretap and intimidate others on behalf of the private eye's clients.

"I have great concerns at this point," added Terree Bowers, who represents another defendant, prominent entertainment attorney Terry Christensen.

"We are still waiting, astonishingly, for discovery of a great number of tapes…. I don't see how we are in that position this late in the game," Bowers added, referring to the scheduled October start of the trial. "We need to know what they are withholding and why they are withholding it."

Lally and co-prosecutor Daniel Saunders disagreed with the contention that they had purposely withheld evidence from defense attorneys. To the contrary, Saunders told the judge, authorities have turned over huge volumes of evidence and have been stymied in producing more tape-recordings because of the complexity of Pellicano's encryption methods.

If defense attorneys "are so desperate to get those files … ," Saunders said, glancing at Pellicano, "the man with the password is sitting right there."

The private eye, who grinned often during the courtroom discussion about evidence in the case, has been in federal custody for three years — first for pleading guilty to possession of illegal explosives and, since February, on the current charges that he directed a racketeering enterprise that included wiretapping, witness tampering and other crimes.

During his time behind bars, federal authorities have been poring over tens of thousands of documents taken from his Sunset Boulevard offices, as well as the 1,300 recordings seized by FBI agents.

At Monday's court hearing, prosecutor Saunders alleged the recordings include "at least one" illegally intercepted conversation as well as "hundreds of calls" in which Pellicano allegedly spoke to clients about wiretaps. Saunders also said there was evidence from dozens of witnesses alleging that Pellicano had engaged in wiretapping.

Saunders did not provide details on the techniques used by the FBI to decode the encrypted recordings but acknowledged that the methods were not ones that the government would want to share in open court.

Other law enforcement sources have said for months that the FBI brought in encryption experts from other federal agencies to help crack the codes allegedly used by Pellicano to safeguard his recordings.

Whether authorities will ever decode all of the alleged evidence remains a mystery.

Last week, one person close to the federal investigation said it was possible that the government will never decipher the remaining recordings because Pellicano's encryption methods "are that good." But the same person considered that possibility insignificant in the overall scheme of the case.

"We're going to keep moving forward, but we've already got plenty of evidence," said the source, who declined to be identified because of an ongoing protective order in the case.

Steven Gruel, Pellicano's attorney, took umbrage at the government's suggestion that Pellicano himself holds the key to evidence sought by the defense.

"They have had almost four years to do this," Gruel said, referring to the time since the FBI's first search of Pellicano's office in late 2002. "And Mr. Pellicano is not going to make their job any easier."

Before the end of Monday's hearing, the judge told attorneys for both sides that she would authorize a special master, possibly a retired federal judge, to help expedite disputes over evidence still being sought in the case.

Outside court, prosecutor Saunders rejected the suggestion by defense attorneys that the government was moving slowly, because it is still putting its case together. "We are prepared to go to trial tomorrow if that is what the defense really wants," he said.