Doubts Cloud Pellicano Wiretap Case

No recent indictments and slow progress on decoding the PI's tapes fuel questions about the federal investigation.

By Greg Krikorian and Kim Christensen
Times Staff Writers

June 26, 2006

Almost four years after FBI agents swarmed the offices of Hollywood's most infamous private eye, Anthony Pellicano, there are signs that a sweeping investigation of alleged wiretapping and other crimes might end up like most things in Tinseltown and fall short of its billing.

In recent weeks, authorities say, government code-breakers have been making slow progress in decrypting nearly 300 of Pellicano's audio files that remain encoded.

People familiar with the investigation say authorities have not cracked the sophisticated codes faster in part because federal agencies — including the National Security Agency — are busy with more pressing matters, notably counterterrorism cases.

Uncertainty about the government's case also has been fueled by the lack of a new indictment, more than three months after prosecutors said one was imminent.

And with the clock ticking on the statute of limitations, there is no indication that prosecutors will seek an indictment against entertainment attorney Bert Fields, the most prominent figure to acknowledge that he is a subject of the investigation.

From early on, the case has thrust some of Hollywood's biggest names into an unwanted spotlight.

Former superagent Michael Ovitz and current studio chiefs Brad Grey of Paramount Pictures and Ron Meyer of Universal Studios all have been called as witnesses before a federal grand jury about their personal or professional relationships with the pugnacious investigator. All have denied knowledge of Pellicano's alleged illegal activities, including wiretapping, witness intimidation and accessing confidential law enforcement records.

But despite nonstop speculation about who among Hollywood's entertainment and legal elite would be charged, the investigation has netted few marquee names other than prominent attorney Terry Christensen and director John McTiernan. Christensen has pleaded not guilty to wiretapping and conspiracy charges. McTiernan pleaded guilty to lying to the FBI about his knowledge of Pellicano's activities.

Thus far, seven of the 14 people charged in the case have admitted guilt, while Pellicano and his six co-defendants face an October trial.

Whether others will be indicted rests largely on the government's ability to directly tie Pellicano's clients to his alleged crimes. That task is complicated by the private investigator's penchant for secrecy and the government's burden to demonstrate that his clients knew of his alleged illegal actions.

Fields, for example, acknowledged nearly three years ago that he was a subject of the investigation.

He has denied wrongdoing while acknowledging that he hired Pellicano to work on various cases over the years. Some of them were cited in a 112-count federal indictment unsealed in February.

Earlier this year, with federal prosecutors facing a deadline for deciding whether to file charges against Fields, his attorneys agreed to temporarily waive the statute of limitations to give the government more time to investigate.

Now, however, the government's indictment of Pellicano and its time frame of his alleged crimes suggest that the five-year statute of limitations could soon expire, if it hasn't already, on at least some of the Fields cases in which Pellicano is accused of wiretaps and other crimes. The one clear exception is a February 2002 case in which actor Sylvester Stallone allegedly was wiretapped.

Since the statute of limitations was extended earlier this year, neither federal authorities nor Fields' lawyers have discussed the deadlines or potential evidence in the case.

But Fields' lead attorney, John Keker, remained confident recently that his client would not be charged.

"I continue to believe that Bert Fields will not be indicted," the San Francisco lawyer said, "because there is no evidence he should be."

Based in part on the absence of new charges in the case, other defense attorneys recently have questioned whether the federal investigation, which was unveiled with great fanfare, is now sputtering.

They also criticize the prosecution's handling of the case.

"I think it is extremely troubling the way this case is unfolding," said lawyer Terree Bowers, a former prosecutor who represents Christensen, one of the seven defendants. He said he is "totally perplexed" by the government's conduct.

"They have stated in open court that they will be filing a superseding indictment," he said. "That has not happened. We keep being assured of full and complete discovery. And yet we are still receiving things in a piecemeal fashion."

Added Bowers: "It's a classic case of hide the ball."

Federal authorities will not discuss evidence in the case or where the investigation is headed.

"It is our responsibility to investigate suspected crimes, to bring charges where they are warranted and to litigate those cases in court," said Thom Mrozek, spokesman for the U.S. attorney's office in Los Angeles. "In other words, it is our responsibility to pursue justice…. This investigation is continuing."

Authorities also dismissed the notion that the government has hyped expectations that prominent lawyers and Hollywood figures would fall.

"It's not for us to puff up or deflate something," said FBI Assistant Director Steve Tidwell, who runs the Los Angeles division. "All we do is move forward … and we are committed as ever to this" investigation.

For all the criticism of the government's case by defense attorneys, their complaints have not convinced U.S. District Judge Dale S. Fischer, who has denied several courtroom challenges to the investigation and the evidence it has yielded.

Based on representations made so far in court, the volume of evidence compiled by the government is significant. In addition to 367 recordings turned over to defense attorneys, authorities have turned over 23,000 pages of documents and made available 100,000 pages more.

In addition, law enforcement sources and others who have glimpsed the government's case contend that authorities have ample proof of wiretapping, witness intimidation and other crimes.

Even if prosecutors don't have as much evidence as some believe, defense lawyer Peter Knecht said the high-profile nature of the case has put tremendous pressure on the government to deliver.

"In my experience, the U.S. attorney's office in Los Angeles — like the district attorney — will not indict a case unless they are fairly convinced they can get a jury to convict," said Knecht, whose client, Sandra Wil Carradine, is among those who have pleaded guilty. "And this case has had so much publicity attached to it — for the government to lose it would be a real blow. It would be like losing [the] O.J." Simpson murder case.

Though authorities have made progress recently in decoding the almost 300 audio files that remain encrypted, prosecutors have publicly acknowledged having evidence of only one actual wiretap — as opposed to recordings of Pellicano and others allegedly discussing wiretaps or information obtained from illegal eavesdropping.

Without a cache of incriminating wiretaps, the government will have to rely more heavily on circumstantial evidence than many had expected.

Whether that will be sufficient remains to be seen. But already, defense lawyers have suggested that the government's recent disclosures show that it has less evidence than was widely believed. Defense attorneys also accuse prosecutors of dragging their feet in turning over evidence they do have.

One lawyer in the case said prosecutors have done "a lot of saber-rattling" in recent months but have little to show for it.

Another, Lawrence Semenza, who represents defendant Abner Nicherie, said the government's acknowledgment that it does not have a treasure trove of actual wiretaps suggests that the case against Pellicano and others has been "a good bluff."