Pellicano Prosecution Rests

Prosecutors rested their case Thursday against Anthony Pellicano and four co-defendants by playing a tape of the indicted private eye talking to a business manager who had just been sued by Sylvester Stallone.

Pellicano is heard on the 2002 tape telling 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 said.

Starr had been sued by Stallone over his investment in Planet Hollywood restaurants. 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.

Federal prosecutors contend the tape proves that Pellicano gained information by wiretapping Stallone’s phone calls.

Pellicano, 64, 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. He and the co-defendants have pleaded not guilty to a variety of charges.

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.

"There was a rumor going around (Pellicano) was doing those kind of things," Nagler told jurors. "I said we have to check those things out the best we can."

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."

Prosecutors did not play any wiretapped phone calls involving Stallone.

Nagler testified that during one phone call, he made his only mention of a woman who had complained to Starr about her investment in Planet Hollywood.

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 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 had asked for more than $7 million in damages and attorneys fees.

Stallone, whose name appeared on the prosecution’s witness list, was not called to testify.

In other developments, U.S. District Judge Dale Fischer granted a prosecution request to dismiss a total of 28 charges against Pellicano and former Los Angeles police Sgt. Mark Arneson.

The dropped counts mostly involved wire fraud and identity theft that authorities had alleged involved Arneson searching law enforcement databases for Pellicano. More than 35 charges remained against the two men.

Defense attorneys filed a motion for acquittal, arguing the evidence was insufficient to establish guilt beyond a reasonable doubt against their clients.

Arneson’s attorney, Chad Hummel, said prosecutors didn’t prove that his client, Pellicano and former telephone company employee Rayford Earl Turner collaborated in a criminal enterprise.

"What the evidence has shown, your honor, was that Mr. Pellicano was a stand-alone, ultra-secretive private investigator," who didn’t share information with his associates or employees, Hummel said. "This was a one-man show."

Fischer said she would make her ruling at a later date.

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