Law Firm That Often Used Pellicano Won’t Be Charged for Now, Federal Prosecutors Say

Though still weighing charges against individual attorneys, federal prosecutors have decided not to seek an indictment against the largest law firm linked to the ongoing investigation of Hollywood private detective Anthony Pellicano, sources close to the case said Wednesday.

The decision, recently conveyed to the firm by authorities, is significant because Pellicano had worked for a number of attorneys at the law firm of Greenberg, Glusker, Fields, Claman, Machtinger & Kinsella, notably partner Bert Fields, one of the best-known entertainment attorneys in Hollywood.

The decision against prosecuting the firm at this time does not preclude prosecutors from filing charges against individual attorneys who work there if they can prove that the lawyers knew that Pellicano was allegedly wiretapping their adversaries and improperly accessing confidential information to help win cases. Nor does it preclude prosecutors from filing charges against the firm in the future if new evidence arises.

Partners at Greenberg Glusker have said repeatedly that neither the firm nor any of its attorneys engaged in any illegal activity with Pellicano or knew that he had violated the law on their behalf.

For months, Los Angeles’ legal community has been abuzz with speculation that Greenberg Glusker’s repeated use of Pellicano to uncover damaging information about adversaries in litigation put the firm in legal peril and could lead to its breakup.

A 110-count indictment filed against Pellicano and seven other defendants identifies individuals on the opposing side of half a dozen Greenberg Glusker cases who were targets of illegal background searches Pellicano allegedly conducted through a contact in the Los Angeles Police Department.

The indictment alleges that Pellicano and his co-defendants used wiretaps and illegal background checks to obtain “confidential, embarrassing or incriminating” information, typically to help attorneys and other clients gain an advantage in civil or criminal litigation.

Speculation about the firm’s potential legal jeopardy was fueled by the recent announcement that two top attorneys at the Century City firm, Dale F. Kinsella and Howard L. Weitzman, were leaving to start a new practice, taking with them eight Greenberg Glusker attorneys.

In announcing the move, Kinsella and Weitzman said the decision had long been planned and had nothing to do with the federal investigation.

It was unclear whether authorities decided not to bring charges against Greenberg Glusker because it was cooperating with the investigation, or because evidence was insufficient to prosecute the firm -- or both.

Federal prosecutors handling the case refused to comment Wednesday, as did Brian Sun, an attorney representing Greenberg Glusker.

In February, federal prosecutors and attorneys for the law firm agreed to extend a deadline for the government to file any charges against the firm or individual attorneys in connection with the Pellicano case. The decision gave the government more time to investigate its case and defense attorneys additional time to persuade prosecutors that no charges should be filed.

Though unusual for law firms to be criminally charged in such cases, the potential exposure for Greenberg Glusker seemed significant enough for the firm to hire outside attorneys to guide it through the investigation.

Law firms make difficult targets for criminal prosecution, legal experts said.

“How do you prove that a group of lawyers, officers of the court, got together and conspired to engage in illegal conduct? It’s virtually impossible,” said attorney Diane Karpman, a legal ethics expert.

For the federal government to offer a pass at this time, the firm “must really come in and show they were not aware of any misconduct and be as cooperative as possible,” said Laurie Levenson, a former federal prosecutor who teaches law at Loyola Law School in Los Angeles

Even without a federal criminal investigation looming, Greenberg Glusker’s legal troubles are not over. They still face civil lawsuits filed by those named as “victims” in the indictment who now allege that the firm was responsible for Pellicano and his associates allegedly violating their civil rights through wiretaps and illegal background checks. Defending those claims, however, becomes easier without criminal convictions.

If convicted of an intentional criminal act, the firm’s insurers are no longer responsible to help defray litigation costs, experts said. Insurance typically covers only negligent acts.

Without insurance coverage, lawyers could be held personally liable for verdicts against the firm. That is why, Karpman said, “law firms fight these criminal cases tooth-and-nail.”

To date, the FBI investigation has resulted in charges against 14 people, including Pellicano on charges of racketeering, wiretapping, witness tampering and other crimes. Five people so far have pleaded guilty to perjury and other charges.