A decade ago, tough-talking celebrity sleuth Anthony Pellicano’s win-at-any-cost tactics made him the No. 1 guy Hollywood actors, suits, and their attorneys turned to whenever they had a problem. With a baseball bat in the trunk of his car and a computerized phone-hacking system in his Los Angeles office, Pellicano dug up dirt on his client’s enemies and helped make those problems disappear – whether it was an angry spouse, a troublesome business competitor, or a salacious accusation against a pop star.
But in 2008, Pellicano was found guilty on 76 charges—including wire fraud, identity theft and racketeering—and now he sits in a federal correctional facility in Big Spring, Texas, cooling his heels until his release in 2019.
Yet the former private eye may soon be trading in his beige prison jumpsuit, if his motion requesting bail pending appeal of his racketeering charges pans out. Pellicano filed the motion last week in a federal court in Los Angeles.
Pellicano’s release would be a bombshell in Hollywood, where his trial rattled Tinseltown’s elite powerbrokers, several of whom were dragged onto the stand. Pellicano refused to name names at his trial, and he was sentenced to 15 years in prison.
To be granted bail, Pellicano has to prove that he is not a flight risk or a danger to the community. He also has to show that there are “substantial” appellate reasons why he should be released. Pellicano’s attorney, Steven F. Gruel, cites two recent rulings in the U.S. Supreme Court and the Ninth Circuit Court of Appeals that "completely eviscerate the government’s convictions in [Pellicano’s] case.” Gruel predicts that because of those rulings, Pellicano’s RICO appeal will “likely result in reversal, an order for a new trial, or a sentence that does not include imprisonment.”
But Pellicano, now 68, is pessimistic that he will be released on bail pending his appeal. “I expect that the judge will not grant bail,” he wrote from prison to the Daily Beast. “Either she will deny it from chambers immediately or she may grant a hearing. If she grants a hearing she may order me back or simply hold the hearing without me (which is not proper) and then deny me. I hope, if she is going to deny the bail, that she does it quick because then I can immediately apply to the 9th Circuit for bail. They will, or will not, grant it … We shall see.”
The U.S. Attorney’s Office in Los Angeles declined to comment for this story, but it is planning to file a motion next week opposing Pellicano’s release. Federal Judge Dale Fischer, who presided over Pellicano’s wiretapping and racketeering extravaganza, will decide July 9 if the former sleuth should be granted bond and freed until his appeal can be heard, which will most likely happen in 2014.
Over the years, Pellicano’s clients allegedly included Michael Jackson, Elizabeth Taylor, Arnold Schwarzenegger, Farrah Fawcett, and Chris Rock. Pellicano's life in the fast lane came to an abrupt end in 2002 when federal agents began investigating his role in a plot to threaten L.A. Times reporter Anita Busch. Busch had previously written about Hollywood agent Michael Ovitz's downfall, and was looking into a story about alleged mob ties to action star Steven Seagal. Agents raided Pellicano’s office and discovered plastic explosives and a pair of hand grenades, and the private eye wound up pleading guilty to possession of illegal explosives in 2004. Investigators also discovered a treasure trove of transcripts and encrypted tapes of phone conversations he’d illegally tapped. Among those he allegedly eavesdropped on were Sylvester Stallone, Garry Shandling, and Nicole Kidman.
Pellicano’s once-lucrative private investigation firm is now defunct, and his private investigator’s license is suspended. Gruel says Pellicano is broke and nearly blind due to an eye condition called spasmodic blepharospasm. “He is not dangerous to the community,” Gruel said in an interview with the Daily Beast. “He can’t carry a weapon because he is a convicted felon from the first case. He doesn’t have a passport anymore. It is hard to be a danger to the community if you can’t see. It cries out for common sense.”
Gruel says that if Pellicano is released, he will move into his cousin’s townhouse in San Clemente, Calif. He says electronic monitoring can also be imposed if deemed necessary, as well as travel restrictions and “no contact” conditions.
“Although it may not publicly say so, the government shares this view that Mr. Pellicano is not a danger,” Gruel wrote in Pellicano’s motion for bail pending appeal. “To suggest that Mr. Pellicano is a ‘danger,’ now in light of his advanced age, health and lack of resources would be a further illustration of the prosecution’s frustration with Mr. Pellicano’s steadfast decision to stand tall (and silent); all the while unwilling to cooperate.” Gruel maintains that federal prosecutors have a vendetta against Pellicano because he didn’t flip.
Currently, three of Pellicano’s codefendants are out on bail pending appeal, including former Los Angeles Police Department sergeant Mark Arneson, who provided DMV and criminal database information to Pellicano. Arneson was released in 2009.
Pellicano is pinning some of his hopes for release on two federal court rulings. One of the cases, United States v. Nosal, involves David Nosal, the San Francisco executive of a headhunting firm, who was indicted by a grand jury in 2008 for allegedly stealing trade secrets so he could start a competing company. The laundry list of charges included theft of trade secrets, mail fraud, conspiracy to commit mail fraud, and the unauthorized use of a computer.
In order to convict Nosal, the federal government relied in part on the Computer Fraud and Abuse Act, a three-decade-old computer antihacking law, to prosecute him for violating his company’s computer-use policy. Nosal’s defense team argued that employees should not be prosecuted under the law when they use their workplace computers, even if they access information that may violate corporate policies. The case landed in the Ninth Circuit Court of Appeals, and in April the court ruled that the antihacking law was too heavy-handed and broad and could not be used solely to prosecute someone for the unauthorized use of information on their work computer. However, the decision may end up in the Supreme Court because three other federal courts have ruled differently on the law.
Gruel says Los Angeles federal prosecutors used the same antihacking law to convict Pellicano. “If you go in and take out information and have authorization to do it, what I do with it can be against my work performance but maybe not a violation of a law,” Gruel told the Daily Beast. The officers who allegedly provided information to Pellicano “weren’t violating any law because they were authorized to be in the computers,” he said.
Gruel also points to a 2010 Supreme Court decision is the case of U.S. v. Jeffrey Skilling as a potential get-out-of-jail-free card for Pellicano. Skilling was indicted on 35 counts of fraud and insider trading related to the Enron collapse. In 2010, the Supreme Court ruled that the federal government had misused the so-called “honest services” fraud statute—an anti-fraud law making it a criminal offense to “deprive another of the intangible right of honest services”—to convict Skilling. Justice Ruth Bader Ginsburg, who wrote the court's main opinion, said Skilling did not violate the honest-services law because the statute used against him applied only to kickbacks and bribery schemes, and the Enron CEO was not charged with neither.
Ginsburg sent the case back to the Fifth U.S. Circuit Court of Appeals to decide whether his myriad other charges such as conspiracy should be dismissed. In April 2011 the lower court denied his appeal, ruling there was plenty of other evidence of wrongdoing to keep him behind bars.
Pellicano and his codefendant Arneson were convicted, among other things, of 17 counts of honest-services wire fraud. In light of the Supreme Court ruling, Gruel says there is ample ammunition that the prosecution was wrong in Pellicano’s case. “Honest services,” wrote Gruel, is “limited to bribery and kickbacks—not a police officer’s providing names and information from work computer databases.”
However, when Pellicano was convicted of racketeering, the jury also found he had engaged in bribery with Arneson.