- Associated Press - Thursday, October 25, 2012

LOS ANGELES — Four years after a private eye went to prison for wiretapping phones of the rich and famous on behalf of celebrities and Hollywood heavyweights, his clients are facing hefty bills for his skullduggery.

In the first of more than a dozen lawsuits against Anthony Pellicano’s well-heeled clients, a jury last week ruled against the ex-wife of a billionaire philanthropist, awarding $4 million to his three adult children and former personal assistant after she violated their privacy.

The verdict could spell trouble for other former clients who have been sued, such as Paramount studio head Brad Grey and one-time superagent Michael Ovitz.

The case against the ex-wife, Jacqueline Colburn, is the first to be tried before a jury stemming from a criminal probe that ensnared Pellicano for targeting Sylvester Stallone, Garry Shandling and Kevin Nealon and for work he did for others such as Chris Rock and an attorney who represented MGM mogul Kirk Kerkorian in a child-custody battle.

Pellicano, 68, is serving 15 years in a federal prison in Texas after being convicted in 2008 of racketeering and more than six dozen other counts, including conspiracy, wire fraud and wiretapping. He is scheduled to be released in March 2019.

The trial, billed as a blockbuster that would reveal the seedier side of Hollywood, fizzled in the end as Pellicano kept silent, acting as his own lawyer.

The evidence showed he dug up dirt on clients’ rivals by bribing phone company employees to install wiretapping software and had rogue police officers search databases for personal information. The information was used in hardball negotiations for business disputes, divorces and lawsuits.

Clients such as Mr. Grey, Mr. Ovitz and Mr. Rock were never charged in the case and they insisted they didn’t know about Pellicano’s tactics. Mr. Kerkorian also has said he had no knowledge of any wiretapping being used.

Mr. Grey and Mr. Ovitz are facing lawsuits that could be costly and where the evidence is potentially stronger than the Colburn case, which relied largely on testimony and not on FBI reports or damning audio tapes made by Pellicano.

“I would think people will think long and hard about their exposure,” said lawyer Lawrence Segal, who represented Richard Colburn’s children. “A lot of defendants may be thinking that in the absence of actual recordings they stand a decent chance of a defense. But we were able to prevail on a largely circumstantial case.”

About a dozen lawsuits have moved slowly through the legal system alleging wiretapping and privacy invasion. Among the other defendants are AT&T and the cities of Beverly Hills and Los Angeles, where the police officers who provided information to Pellicano worked.

Most of the lawsuits are pending before a judge but have been mired by appeals in the criminal case, which allows Pellicano and others to preserve their right against self-incrimination, and the exchange of documents between attorneys was put on hold for many months. No trial dates have even been set.

A settlement in some of the lawsuits has been reached, said lawyer Brian Kabateck, who represents several Pellicano victims, but a deal hasn’t been finalized. He said the Colburn verdict provides some reassurance to his clients.

“It shows that juries are still outraged about this behavior even though it was many years ago,” he said. “I think it sends a message to the defendants that they are going to have to pay real money.”

The verdict in the Colburn case is a fraction of the fortune the billionaire philanthropist left behind when he died in 2004 at age 92.

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