What began with a crude attempt to intimidate a reporter has grown into a federal wiretapping investigation that has rattled Hollywood's legal elite.
In recent months, a grand jury in Los Angeles has summoned witnesses whose conversations with at least one top entertainment lawyer were allegedly taped by famed private investigator Anthony Pellicano.
Federal agents, meanwhile, have approached several actors and producers who had been engaged in litigation in which Pellicano was involved. Sources said the agents read them snippets of their telephone conversations that had been secretly recorded.
Pellicano was hired by entertainment lawyers to unearth information about legal opponents, and investigators believe he obtained some of it through illegal wiretaps.
Investigators want to know what, if anything, attorneys who hired Pellicano knew about his alleged activities. One is Bert Fields, among Hollywood's most recognizable lawyers. He has employed Pellicano while representing such A-list clientele as Tom Cruise, Michael Jackson and Kevin Costner.
Fields has acknowledged that the FBI interviewed him several months ago at his Century City office. "It was a surprise," he said Friday of the hourlong interview. "But life is full of surprises." Fields denied knowledge of any improper actions by Pellicano.
The breadth of the investigation remains unclear. Fields is the only lawyer whose name has surfaced publicly in the probe. Federal sources, however, said a raid on Pellicano's office last November yielded a bounty of documents, including transcripts of taped conversations, that have led them to individuals with no connection to Fields' cases.
"There are many, many nervous people in town," said one white-collar defense lawyer familiar with parties involved in the investigation. "A lot of entertainment lawyers hired Pellicano."
Pellicano, who begins a federal prison sentence this month for possessing illegal explosives, could not be reached for comment Friday.
But attorney Martin Singer, whose clients have included Bruce Willis and Sylvester Stallone, said: "I can't believe Anthony would do the kinds of things they are accusing him of."
Singer, who has used Pellicano on cases, said he has not been contacted by the FBI or any other law enforcement agency.
The probe has its unlikely roots in an incident involving Los Angeles Times reporter Anita Busch, who was investigating the connection between action star Steven Seagal and alleged mafia associate Julius Nasso.
On the morning of June 20, 2002, when Busch walked out of her apartment, she found an overturned cooking pan on her windshield, along with a taped cardboard sign reading, "Stop." There was a small shatter in the windshield. Under the pan was a rose and a dead fish. Los Angeles police were called to the scene and initiated an investigation.
The next day, a man telephoned Busch, telling her that someone was going to blow up her car and that he knew his name. In all, he called about six times. Authorities later tracked down the caller, who agreed to wear a hidden microphone in a meeting with the alleged vandal, an ex-convict and onetime drug dealer named Alexander Proctor.
In an Aug. 13, 2002, conversation, according to documents submitted in court by the FBI, Proctor said the man who had hired him "was the private investigator Anthony Pellicano."
Pellicano denied he had anything to do with the threatening gesture against Busch. But with Proctor's statement in hand, federal agents obtained a search warrant. Last Nov. 21, a dozen investigators descended on Pellicano's offices in a Sunset Boulevard office building.
There they found in a safe two modified hand grenades and a quantity of C-4 military-type plastic explosives, as well as $200,000 in cash, jewelry and gold bullion. Pellicano was allowed to keep the $200,000 but was charged with two counts of felony possession of explosives.
In the FBI raid, agents also found computer files with massive amounts of information chronicling Pellicano's work history. It is those files, sources said, that have led FBI agents to Fields and others in their months-long investigation.
"They [FBI agents] believe they have evidence Anthony Pellicano illegally wiretapped people," said one person close to the investigation. "And they are certainly implying to people that they only found out about who to talk to because of wiretaps."
Along the way, investigators also uncovered evidence suggesting that an Los Angeles Police Department sergeant tapped into confidential police computer databases in search of personal information on Pellicano's behalf.
Sgt. Mark Arneson, a veteran of nearly 30 years on the LAPD, was suspended as a result. In checking the computer logs in Arneson's department, investigators said they found a pattern of connections with people whom Pellicano was investigating, including reporter Busch.
After being charged with the explosives violations, and having his name placed at the center of the wiretapping investigation, Pellicano's business evaporated. He closed shop but vowed to fight the charges against him. Midway through his trial last month, he abruptly reversed himself and pleaded guilty to both charges. He faces 27 to 33 months in federal prison. He is to be sentenced Jan. 20, but has volunteered to begin serving his prison term Nov. 17. Meanwhile, the investigation that took on a life of its own continues with agents in the field and witnesses testifying before a grand jury. The investigation is being led by Assistant U.S. Atty. Dan Saunders.
One entertainment figure involved in a legal dispute in which Fields represented his opponent said in an interview that FBI agents visited his house last spring "and told me my [phone] lines and my attorney's lines were tapped by Fields ... and Pellicano."
He said he later testified before a federal grand jury looking into the matter. "I could tell from their questions that they had listened to tapes of conversations [that had occurred] during my case.... They were asking me questions that encapsulated conversations my attorney and I had with witnesses in our case."
The 59-year-old Pellicano has cultivated a tough-guy image since moving to Los Angeles in 1983 from Chicago, where he began his career chasing down deadbeats who failed to pay their Spiegel catalog bills.
Along the way, he became a self-taught expert in analyzing audiotape. His big break came in the case of automaker John Z. DeLorean. Pellicano's analysis of a government audiotape helped acquit DeLorean of cocaine-trafficking charges.
"I only use intimidation and fear when I absolutely have to," he was fond of saying.
Times staff writers Chuck Philips and James Ricci contributed to this story.