11:35am PT by Austin Siegemund-Broka, Eriq Gardner
Anthony Pellicano's Prison Sentence Vacated by Appeals Court
A decade after private eye Anthony Pellicano captured the attention of the public after it was revealed he spied for powerful clients like Michael Ovitz and Kirk Kerkorian as well as celebrities like Tom Cruise and Chris Rock, he could be tasting freedom much sooner than expected.
After being convicted in 2008 of an assortment of charges, Pellicano sits in a Texas prison cell at the moment. He was scheduled to serve prison time until 2019 and be released at the age of 75. On Tuesday, however, the 9th Circuit Court of Appeals vacated his prison sentence.
The federal appeals court did so after overturning his convictions for aiding and abetting computer fraud and unauthorized computer access upon the determination that the jury instructions at trial were erroneous and prejudicial. At the same time, the federal court found there was enough evidence to uphold the imprisoned private eye's racketeering and identity theft convictions, but told the trial judge he must be re-sentenced.
Pellicano, who has revealed he has a brain condition and has been pleading for early release, will now go back before the judge to hear his fate.
Daniel Saunders, who prosecuted Pellicano in the 2008 convictions including illegal weapons possession, tells The Hollywood Reporter that he expects the judge to impose the same sentence. "My expectation is that the re-sentencing will be largely a formality because the RICO conviction drove the sentence," he says.
But Pellicano attorney Steven Gruel will request an en banc rehearing of the appeal first. "Any re-sentencing would be considerably down the road until we exhaust all appellate options," he tells The Hollywood Reporter. "We made some huge inroads in aspects of the case, but the major one I wanted was the RICO overturned. It didn't happen, which doesn't mean we won't have another swing."
For most, Pellicano came to public attention as the result of an FBI investigation stemming from an incident where a dead fish, a rose and a card that read "Stop" were left on the broken windshield of former Los Angeles Times reporter and Hollywood Reporter editor Anita Busch's car.
The ensuing investigation became a high-brow tabloid story with talk that the private eye was spying on behalf of Hollywood's elite against others in town, such as actor Sylvester Stallone and comedians Garry Shandling and Kevin Nealon. Initially, suspicion over those responsible for leaving the dead fish and note centered on actor Steven Seagal and his former producing partner Julius Nasso, perhaps with mob assistance, though recently Busch has targeted Ovitz for ordering Pellicano to do the intimidation.
Pellicano's criminal trial, though, centered on other acts like being hired by entertainment lawyer Terry Christensen to assist in client Kerkorian's child support dispute by wiretapping Lisa Bonder to prove that her child wasn't Kerkorian's.
Through his endeavors, Pellicano had much assistance including Mark Arneson, the former LAPD officer who was bribed for confidential information, and SBC phone technician Rayford Turner. Today, the appeals court overturned the computer fraud convictions of both Arneson and Turner. The appeals court has upheld the convictions of Christensen for wiretapping.
"We are disappointed in the split decision by the 9th Circuit. We continue to believe that the trial court committed reversible error and will be seeking review from the full 9th Circuit at the appropriate time," says Christensen's lawyer Dan Marmalefsky.
Pellicano and Arneson looked to dodge their racketeering convictions by challenging the predicate acts upon which those convictions rest.
According to 9th Circuit judge Richard Clifton's opinion, the evidence of bribery and illicit access to state and federal law enforcement databases was enough. So was evidence going to the government's theory of honest services fraud connected to the way Pellicano paid Arneson for access to police databases.
It's those findings Gruel wants to challenge. He argues Pellicano paying Arneson to search police databases doesn't constitute bribery and that a Supreme Court decision after Pellicano's conviction (Skilling in 2010) limits honest services fraud to bribery and kickbacks. "In the Pellicano trial the government said all bad acts constitute a violation of honest services law. That's clearly wrong. Why the 9th Circuit didn't go along with that, I'm not sure," he tells THR.
Where Pellicano does get a victory is on charges related to the way phone company employees were paid to allow wiretapping on their equipment. Pellicano was charged with aiding and abetting computer fraud in connection with his involvement with Arneson and Turner's activities. In the trial court's instructions, the jury was told to return a guilty verdict if they found the defendants "knowingly accessed without authorization or exceeded authorized access of a computer... with the intent to defraud."
Leaning on an earlier 9th Circuit ruling (Nosal) — one that came in 2012 after the defendants were convicted — Clifton finds that such an instruction could lead a jury to convict over unauthorized use of information. The judge says the government made no attempt to prove that the telephone employee accessed a database she was not authorized to access in the course of doing her job.
For that reason, Pellicano and a couple of the others will have to be re-sentenced, though many of his other challenges were rejected in an opinion that clocks over 100 pages (read in full here).
One concerned a particular juror who had apparently told other members of the jury he was unwilling to follow the law because he disagreed with it. That juror was dismissed before an alternate was seated and the convictions came. Pellicano and Christensen argued that the dismissal was improper.
Clifton finds no abuse of discretion here, but in a dissent, 9th Circuit judge Dana Christensen disagrees.
"Even considering the court’s conclusion that Juror 7 was not credible, the record supports a reasonable possibility that Juror 7 was a holdout ganged up on by his fellow jurors who disagreed with his views regarding the sufficiency of the evidence," he writes in arguing that the many convictions of Christensen (no relation) and Pellicano should be reversed and their sentences vacated.