28 counts dropped in Hollywood wiretap case

April 10, 2008 5:45:02 PM PDT
A total of 28 charges were dropped at the prosecution's request Thursday in the Hollywood wiretaps case against private investigator Anthony Pellicano and a co-defendant. Also Thursday, a lawyer who once represented Sylvester Stallone in a lawsuit testified that Pellicano had information about the case that he could have obtained only through illegal wiretaps.

Assistant U.S. Attorney Dan Saunders said the government wanted some of the charges against Pellicano and former Los Angeles police Sgt. Mark Arneson because some of the alleged victims weren't available to testify and other counts were redundant.

More than 35 charges remain against the men. They and three other co-defendants have pleaded not guilty.

Pellicano is accused of running a criminal enterprise that used wiretaps and other clandestine tactics to dig up dirt to help his clients gain an advantage in legal and other disputes. The dropped counts mostly involved wire fraud that authorities had alleged involved Arneson searching law enforcement databases for Pellicano.

Before resting their case Thursday, prosecutors played for jurors a 2002 tape of Pellicano talking to a business manager who had just been sued by Stallone. He tells Kenneth Starr that he has the names of potential witnesses and other details from Stallone's camp.

"I'm finding out everything they got," Pellicano says in the tape.

Attorney Lawrence Nagler, who represented Stallone in the lawsuit, testified that listening to calls involving Stallone was the only way Pellicano could have discovered Nagler's legal strategy.

Nagler said that during one phone call, he made his only mention of a woman who had complained to Starr about her investment in Planet Hollywood restaurants. On the tape, Pellicano is heard talking about the woman.

"I don't know how (Pellicano) could know I was after her," Nagler testified.

Nagler said he hired his own private investigator to sweep Stallone's phones for possible bugs but found none. However, federal prosecutors said in the indictment of Pellicano and others that the private investigator used special software to intercept the actor's phone calls "in or around February 2002."

Pellicano, who is representing himself, is to begin his defense Friday.

Prosecutors did not play any wiretapped phone calls involving Stallone, who had sued Starr over his investment in Planet Hollywood.

Stallone claimed Starr had advised him not to unload millions of dollars worth of stock because it would send the wrong message to other investors. Meanwhile, Stallone claimed, Starr was telling others that Planet Hollywood was headed for bankruptcy.

Nagler said Stallone eventually received a "substantial" settlement in the lawsuit, but it came on the condition that he destroy documents and evidence gathered against Starr. Outside court, Nagler declined to disclose the amount of the settlement.

Stallone's name appeared on the prosecution's witness list but he was not called to testify.

Among high-profile Hollywood figures called during the prosecution's case were Chris Rock, Garry Shandling, Keith Carradine, Paramount studio head Brad Grey and Michael Ovitz, the former superagent and Disney executive.