The Pellicano Investigative Agency bribed Los Angeles police to access law enforcement databases, paid a telephone company employee for confidential technical information and hired a software developer to build a custom system for recording calls.
On November 21, 2002, the FBI raided Pellicano’s offices. A threat had been made against film producer Julius Nasso who was suing Steven Segal, and the FBI were looking for evidence that Pellicano was involved in making the threat against her. The FBI agents found two practice grenades which were modified to function as homemade bombs and military-grade C-4 plastic explosives. Pellicano pleaded guilty to the illegal possession of dangerous materials. His sentence was thirty months in federal prison.
On February 6, 2006, Pellicano was indicted on 110 counts. His alleged crimes included racketeering, conspiracy, wiretapping, witness tampering, identity theft and destruction of evidence.