Pellicano’s Link to LAPD Probed

Imprisoned private eye Anthony Pellicano once said that for a price -- “$100,000 for starters” -- he could reach out to “people inside” a Los Angeles Police Department illegal gambling investigation and “make a deal to help things go away,” according to a petition filed Monday.

The petition was filed in Los Angeles Superior Court on behalf of a bookmaker who is seeking to have his conviction overturned on grounds that prosecutors failed to disclose that the lead LAPD investigator in his case, Det. Mark Arneson, was himself under investigation for leaking confidential information to Pellicano for years.

Arneson was suspended from the police force for his ties to Pellicano three days before the bookmaker, Erik Portocarrero, pleaded no contest to two felony charges in May 2003, a fact prosecutors also failed to disclose, the petition states.

Shortly after Portocarrero’s arrest in December 2001 for running a sports betting operation, his brother began receiving calls from a private investigator, who offered to use his LAPD contacts to help “fix” aspects of the case, the petition states. The brother recalled the name of the private investigator as Anthony Pelligrino, but is now convinced that it was Pellicano, Portocarrero’s attorney said.

“Had the connection between Arneson and Pellicano been disclosed, [Portocarrero] could have established that the investigation was intended to produce an illegitimate financial gain for the police officer leading it,” attorney Amy Jacks wrote in the petition.

The allegations add a new facet to the ongoing probe into Pellicano’s conduct, raising the specter that a man known as the private eye to the stars had the power to influence the outcome of LAPD investigations. One high-ranking LAPD official said detectives were reviewing other cases in which Arneson played a supervisory role to determine whether he was involved in any misconduct.

Pellicano, 59, first became the target of a federal criminal investigation in the summer of 2002 after an FBI informant secretly recorded conversations with a man who claimed he had been hired by Pellicano to threaten a Los Angeles Times reporter researching a story about actor Steven Seagal’s alleged ties to the mob. Authorities suspect Arneson tapped into confidential LAPD databases to provide the private investigator with the reporter’s home address, according to a law enforcement source familiar with the case.

During a search of Pellicano’s office in connection with the case, FBI agents found plastic explosives and two hand grenades. Pellicano has since pleaded guilty to possessing illegal explosives and is serving a 30-month sentence in federal prison.

Both he and Arneson remain under investigation in connection with the threat against the reporter. Pellicano is also the subject of wide-ranging wiretap probe in which he is suspected of secretly recording conversations on behalf of entertainment industry lawyers.

Court records reviewed by The Times revealed a financial link between Arneson and Pellicano dating back to the mid-1990s. The documents also show that Arneson was having financial difficulties in the years prior to the alleged shakedown of Portocarrero, and at times provided conflicting information about his finances.

Arneson declined comment through an attorney.

Pellicano’s attorney, Donald M. Re, said that he had not heard Portocarrero’s allegations but that he doubted they were true.

According to the petition filed Monday, Portocarrero’s brother, Jan, received a series of calls from a private investigator who claimed he knew people conducting the LAPD illegal gambling probe.

The private investigator “told me details about what was supposedly happening inside Arneson’s office,” Jan Portocarrero said in a declaration.

Pellicano allegedly told Jan Portocarrero that his brother’s problems extended beyond the LAPD investigation and that the FBI and immigration authorities were also interested in his case. “He said I can ‘fix that’ if I paid his fee,” Jan Portocarrero stated.

According to the court documents, Pellicano’s fee was $100,000 -- “for starters” -- some of which would go to Pellicano and some to his LAPD contacts.

Jan Portocarrero said the private investigator was vague about how he would make the case against his brother “go away.” In the end, he did not pay the private investigator any money.

On May 8, 2003, Erik Portocarrero pleaded no contest to the bookmaking charges and was sentenced to four days in jail -- which he had already served -- five years probation and 90 days of community service.

Portocarrero’s trial attorney stated in a declaration that he would not have advised his client to enter the plea if he had had the information regarding Arneson’s suspension and alleged criminal activity.

In his petition, Erik Portocarrero also alleged that Arneson attempted to intimidate him. In October, for example, he said he found a bullet hole in the windshield of his car, and Arneson’s business card tucked under the windshield wiper. A copy of the repair bill was included in Portocarrero’s court papers.

Portocarrero said that when he read news accounts about Arneson’s suspension, he and a friend called the LAPD and lodged a complaint. Last June, he said, three officers assigned to the internal affairs division interviewed him about his allegations for about two hours. .

LAPD officials have yet to examine Portocarrero’s petition, but plan to compare the allegations to a tape-recorded statement Portocarrero made in June, the high-ranking LAPD official said.

The financial ties between Pellicano and Arneson, as well as information about Arneson’s personal finances, are contained in files from a divorce case and bankruptcy court.

Records in the 1997 divorce showed that Arneson and his first wife owed the IRS about $20,000 following tax audits in 1994 and 1996.

Arneson stated in a court declaration filed in February 1997 that he and his wife had experienced chronic money problems as a couple, and that the difficulties remained following their separation.

“I have repeatedly borrowed money and have been ‘robbing Peter to pay Paul’ to make this situation work,” he wrote.

As the divorce case wore on, Arneson’s then-wife, who was seeking “increased support,” alleged that her husband earned $146,000 during one twelve-month period, according to the court file. She also suspected that he was maintaining secret bank accounts, court records show.

Arneson’s lawyer stated in court papers as part of the divorce proceeding that, for the year 1998, his client earned a base salary of $71,000 as an LAPD sergeant. Any additional income was the result of overtime and side jobs, including one with Pellicano Investigative Agency.

“All income other than that earned from [Mark Arneson’s] full-time position as a Los Angeles Police Officer is second job income and should not be considered” the lawyer contended.

But when Arneson filed for bankruptcy in the summer of 1998, he made no mention of the fact that he was a police officer or that he received income from the LAPD, according to his file in the federal archives in Laguna Niguel.

Under penalty of perjury, Arneson stated that he was a self-employed private investor, and had been for 22 years. He estimated that his income was about $8,000 a month. In another part of the application he placed his annual income at $104,000 and indicated that the source of the money was “private investments.”

Former U.S. Bankruptcy Judge Kathleen March, who reviewed portions of Arneson’s file at the request of The Times, said that if Arneson was indeed an LAPD officer at the time he filed his case, he would have been legally required to disclose his employment with the department and resulting income.

“Every source of income should have been listed,” March said.

March, who has retired from the bench and gone into private practice as a bankruptcy attorney, dismissed Arneson’s case in August 1998 after Arneson failed to file a required financial restructuring plan.