http://www.thesmokinggun.com/archive/years/2007/0807071patterson1.html
The Man Who Bagged The Pelican
A portrait of the con artist at heart of Hollywood wiretap case
AUGUST 7--When the trial of private eye Anthony Pellicano finally
begins in February, federal prosecutors will give jurors a tour of
the accused wiretapper's former world, one in which he worked for
Hollywood's elite--from Tom Cruise and Chris Rock to Paramount
Pictures boss Brad Grey and billionaire Kirk Kerkorian--while also
allegedly doing business with corrupt cops, hired thugs, and scheming lawyers.
But jurors will likely not be introduced to the Los Angeles man
actually responsible for triggering the Pellicano probe. In court, he
is only referred to as a "confidential witness" or "CW" and a judge
has ordered sealed documents which disclose his name (though defense
counsel are aware of the informant's identity).
Daniel Patterson, however, is hiding in plain sight.
Patterson, a 64-year-old grandfather of 11, is the snitch who
provided information that led investigators to raid Pellicano's West
Hollywood office at the outset of the FBI's probe of the private
investigator. That search resulted in the seizure of two hand
grenades and a military grade C-4 plastic explosive, and led to
Pellicano's subsequent plea to federal weapons charges (for which he
was sentenced to 30 months in prison). In addition to the munitions,
agents carted off computer equipment containing thousands of hours of
surreptitiously recorded conversations, tapes that are now at the
center of Pellicano's racketeering and wiretapping case. While the
probe has not netted any marquee names among its dozen or so
defendants, several have already copped to felony charges, including
perjury, computer fraud, and wiretapping.
In interviews with The Smoking Gun, one of which took place in the
dining room of his Temple City, California home, Patterson spoke
about assorted legal entanglements, cooperating with the FBI, and his
low opinion of the government (which, of course, could be expected
from a guy who has frequently been arrested by federal agents). He
also sought to dispel a reporter's assertion that, with three federal
felony convictions on his rap sheet, he had the prototypical
swindler's resume. "You can't offend me," Patterson said. "I'm
actually a pretty good kid." He added, quite affably, "I'm not a con man."
The jowly Patterson, who could pass for former Attorney General Ed
Meese, does not seem like the type to star in a glitzy Tinseltown
scandal. A twice-married father of five, Patterson lives in a modest
suburban home near the Santa Anita race track. His wife of 30 years,
Kathleen, is a school district auditor (which is odd, considering her
husband seems to have little regard for financial controls). Sipping
Fresca as he spoke, Patterson explained that he had no Hollywood
connections and had not been to a movie theater in more than a decade.
His preference, he said, was to stay in the shadows, though that plan
was disrupted when TSG figured out the identity of "CW" and disclosed
Patterson's name in an earlier story on the Pellicano probe. Still,
while defense lawyers argue it is "disingenuous" for prosecutors to
continue to assert the need to keep "CW"'s identity confidential,
government lawyers counter that "the leaking of protected information
to a website does not render that information public for all purposes
or negate the court orders protecting it." The Department of Justice,
it seems, would prefer that the Pellicano case's genesis remain
credited as an Alan Smithee production.
While acknowledging that he "lit the spark" for the Pellicano probe,
Patterson appears poised to reap the benefits of his catalyst's role
while avoiding the messy spectacle of a courtroom appearance, where
defense lawyers would focus on his criminal history and larcenous
disposition. Though Patterson testified before a grand jury that
voted to indict Pellicano, "CW is not expected to be a witness at the
trial," prosecutors disclosed in a court filing earlier this year.
Which is probably a good call since Patterson told TSG, "I really
don't like government a whole hell of a lot. I think that they misuse
their influence. And I believe that they're probably the biggest
crooks out there." His second federal conviction, Patterson
explained, was "a typical government set up." And as for Daniel
Saunders--lead prosecutor on the Pellicano case and the government
lawyer who handled Patterson's own most recent felony conviction--he
had a similarly sharp opinion, recalling that he once said Saunders
"had a propensity for lying."
Patterson's value to investigators lies solely in the fact that he
literally got them in Pellicano's door. He did this by
surreptitiously recording a series of meetings--four of which
occurred in Patterson's own home--with Pellicano pal Alexander
Proctor, a career criminal who trafficked large quantities of heroin,
cocaine, and Ecstasy, and was tied to Russian organized crime
figures. Those tapes, which Patterson made with an FBI digital
recorder in his shirt pocket, formed the basis for the "probable
cause" that allowed investigators to raid Pellicano's office. Though
attacked by defense counsel, the validity of that crucial search
warrant has been upheld in court.
In those sessions, Patterson, with the FBI's guidance, deftly steered
Proctor, 63, through lengthy conversations about his kilo-weight
narcotics deals, which involved frequent drug runs to Mexico and a
Southern California supplier named Javier. In one conversation,
Patterson told Proctor that he had someone who could "move some shit
if Javier could come up with a couple [of kilos]." Realizing that
Patterson was new to cocaine trafficking, Proctor carefully explained
the proper procedures for a successful transaction. "I get the sense
you're not used to drug dealing," Proctor said, adding helpfully that
Patterson "could be easily fooled in a drug deal."
Proctor, however, was the one being hoodwinked.
The veteran drug trafficker, who was introduced to Patterson by a
Russian mob associate, apparently fell victim to his acquaintance's
unassuming, folksy way. A former business associate who told TSG that
Patterson fleeced him of more than $100,000 marveled at Patterson's
"gift of gab," remarking that the convicted felon had an uncanny
ability to separate people from their money.
Patterson cost Proctor his liberty. Faced with damaging admissions on
the FBI tapes--and evidence subsequently gathered via a search of his
1988 Acura Legend--Proctor pleaded to a felony charge of possession
with intent to distribute heroin. He was sentenced to ten years in
prison, from which he is scheduled to be released in July 2011.
Asked about his safety considering he sent a veteran drug trafficker
with mob ties to prison for a decade, Patterson said that he was
concerned "that I could be a target," adding that, upon Proctor's
release, "there's no question he'll come straight for me." Patterson
would not comment on whether he was offered a spot in the Witness
Security Program, though that certainly would not be a given. When
TSG visited him, Patterson's first line of defense appeared to be his
son's lumbering Great Dane puppy.
So what prompted Patterson to place himself in apparent danger?
He likes to chalk it up to the kind of selflessness that was
instilled in him while growing up in 1950s Muncie, Indiana.
In reality, though, it was a bit of altruism mixed with a desire to
save his own ass.
As with many confidential witnesses and informants,
self-preservation was a primary motive for Patterson's cooperation
with the FBI. He is a thrice-convicted felon who most recently
pleaded guilty to federal fraud charges stemming from his role in a
scheme to swindle gold and platinum from several manufacturers.
Though he entered his plea 4-1/2 years ago, Patterson has yet to be
sentenced in U.S. District Court in Los Angeles. His sentencing, now
scheduled for December 10, has been postponed nine times during that
period. While the fraud conviction could land him in prison for
several years, Patterson is likely to escape with a greatly reduced
sentence--perhaps even just probation--due to his extensive work with
the government.
That cooperation was prompted by his arrest for a rather audacious
scheme to swindle precious metals from several manufacturing firms.
Using an assortment of aliases, forged documents, counterfeit checks,
and his very convincing telephone manner, Patterson and his fellow
bandits succeeded in conning two companies out of $615,000 worth of
gold and platinum products. So where does a crook fence gold wire and
sheet? Patterson & Co. opted for a pawn shop in Pacoima in the San
Fernando Valley.
On the heels of the first two scams (during which he posed as an
employee of firms like Sun Microsystems and Ball Aerospace),
Patterson and three cohorts attempted an even larger haul.
Operating from a Pasadena Holiday Inn and claiming to be a Department
of Defense official, Patterson arranged the shipment of $1.6 million
in gold products from a Massachusetts company. The valuable material,
Patterson told the manufacturer, was urgently needed by the
government's Jet Propulsion Laboratories (JPL), which was working on
a "neutron accelerator" for the "shuttle." In communications with the
targeted company, Patterson used the alias "Michael Jeffries" and
notified the company that the gold would be accepted at the JPL
facility by a Dr. Charles Schultz. In letters, he consistently
misspelled his purported military rank, listing it as "Sargent."
Around noon on December 19, 2000, an armored car arrived at a
Pasadena warehouse. Posing as deliverymen were undercover FBI agents,
who were met at the facility by two men, one of whom wore a white lab
coat with a label identifying himself as "Charles Schultz, PhD."
Agents then arrested Anthony Macaluso, 19, and Aleksandr Drabkin, 42,
the purported doctor. Good grief, indeed.
Patterson and fellow swindler Meir Itaev (who introduced Patterson to
Proctor) were later arrested and were named in a federal fraud
indictment returned by a Massachusetts grand jury. Within several
months, Macaluso--the best friend of Patterson's son Joe--began
cooperating with authorities, despite his awareness of Itaev's
reported Russian mob ties.
Within months of Macaluso's cooperation, Patterson also cut a deal.
In subsequent FBI debriefings, he not only detailed his involvement
in the precious metals scheme, but also provided "other information
to other agents in other cases and investigations," according to a
court filing. While Patterson declined in an interview to get into
specifics of those other "cases and investigations," he did say that
agents were interested in developing drug cases and gathering
information about L.A.'s Russian gangster element.
Many months into his cooperation, Patterson learned from Proctor
the details of an attempt to intimidate a Los Angeles Times reporter
who was working on a series of stories about the actor Steven Seagal.
According to Patterson, Proctor said he had been hired by a detective
agency to blow up journalist Anita Busch's car. Though her auto was
not destroyed, Busch found a note taped to her windshield that said,
"STOP." Next to it was an upside down baking tray that concealed a
dead fish and a rose, according to an FBI affidavit.
Armed with Proctor's statements, Patterson did not contact one of his
FBI handlers. Instead, he left a series of six urgent messages for
Busch at her office. When he spoke with the reporter, Patterson
relayed the statements by Proctor, whom he identified only as "Alex."
Patterson's calls, though, came a day late, as Busch's vehicle had
been vandalized a day earlier.
Since Patterson identified himself to Busch, it wasn't long before
law enforcement officials showed up at his door. "If someone is gonna
hurt a young woman, I'm not gonna sit by and let that happen. I knew
it was gonna cause me a problem when I did it," Patterson contended.
"You got to look at yourself in the mirror."
After an initial contact by Los Angeles Police Department detectives,
Patterson was approached by FBI Agent Stanley Ornellas, who was
examining the Busch incident. He asked Patterson--who was already
cooperating with other FBI agents on unrelated matters--to wear a
wire on Proctor. Patterson agreed.
Over a two-month period, Patterson recorded five conversations with
Proctor. Along with the drug talk, Proctor expounded on his
relationship with Pellicano, and implicated the investigator and
Seagal in the plot to intimidate Busch, according to an affidavit
sworn by Ornellas. During one meeting at Patterson's house, Proctor
said that Pellicano had complained to him that the Busch intimidation
attempt "didn't really help, she's back at it again." In their final
taped talk, Patterson told Proctor about a Vanity Fair article about
the Busch threat. "I'm famous," Proctor said. "You're famous,"
Patterson answered, according to a court filing.
Three weeks before Patterson began making FBI recordings, he filed
a Chapter 13 bankruptcy petition estimating his and his wife's debts
as between $500,000 and $1 million. Among Patterson's creditors were
a variety of individuals who, in TSG interviews, claimed to have been
bilked by him. "He's a no good, slimy cheating liar," said one
creditor who claimed they were fleeced for about $20,000. The money
was earmarked, Patterson told the investor, for an offshore gambling
business. Another creditor lost about $125,000 in the same venture,
which never materialized.
Two sources who dealt with Patterson at this time recalled him
offering them investments in an unspecified $65 million project based
in the United Arab Emirates and a package delivery service that he
said would rival Federal Express. One of the sources said that
Patterson also sought $100,000 investments in a supposed venture that
leased foreign satellites. "He said he was number eight on the list
from Yugoslavia or Russia to buy a satellite," the source said. "And
that I could double my money."
Both sources said that Patterson spoke of his connections to Russia
mob figures. "He comes off as charming and then pulls intimidation
tactics," said one source who, years later, still bristles at the
mention of Patterson's name. "Scum of the earth."
Jobless and swamped by debt, Patterson--who listed his criminal
defense lawyer as a $16,000 creditor in his bankruptcy
action--attempted to turn his FBI cooperation into a quick buck.
After recording Proctor talking about Seagal's alleged role in the
Busch threat, Patterson placed a call to New York lawyer Barry Levin,
who then represented businessman Julius Nasso. Seagal and Nasso, who
once produced movies together, were then engaged in a bitter court
dispute over millions in film earnings. During several conversations,
Levin recalled, Patterson spoke of his secret undercover operation
and offered to provide information gleaned from Proctor that would
help Nasso's litigation against Seagal. Explaining that he needed
money for his legal fees, Patterson asked Levin for $30,000 in
exchange for his information. In a conversation with Nasso, he
solicited the businessman for an investment in his sports gambling
business (which was not operational).
"He solicited a bribe," said Levin, who later turned over an audio
tape of the key Patterson shakedown conversation to Saunders, the
prosecutor handling the Pellicano case. The Pellicano prosecution
apparently became Saunders's case because he had previously handled
the gold theft charges against Patterson.
Faced with Patterson's duplicity, which investigators learned about
two months before raiding Pellicano's office, they appeared to go out
of their way to absolve their prized informant. In interviews with
the FBI, Patterson claimed not to recall asking Levin for any money,
adding that he did not set out to do anything illegal with regard to
the highly unorthodox call to the defense attorney, according to one
FBI report. In a subsequent report, Patterson noted that he was "in
trouble financially with his attorney" and may have mentioned an
amount of money to Levin.
When federal investigators first learned of the Levin contact,
Patterson "admitted briefly discussing the investigation" with him,
but stated "he did not receive any money." For this serious security
breach, Patterson was "admonished for divulging information," though
not benched from the Pellicano probe. In fact, days after learning of
Patterson's improper activity, FBI agents again wired him up for a
meeting with Proctor, this time in the parking lot of a Studio City
supermarket. Patterson and Proctor discussed the details of a planned
wholesale cocaine purchase.
For law enforcement officials, Patterson's credibility is of little
importance. His tapes are what matter. His unpaid bills, legal
judgments, bankruptcy, shady investment schemes, and litigation
history are meaningless.
For instance, he was sued in 2005 by an L.A. businessman who agreed
to sell Patterson a boat for about $400,000. Patterson claimed to be
a wealthy investor who traded oil commodities and operated a Las
Vegas investment firm. He offered to pay the owner's asking price if
the seller agreed to invest in one of his businesses.
Of course, Patterson defaulted on promissory notes after using the
boat without permission for several months. Asked about the lawsuit,
Patterson claimed the litigation was being settled, when, in fact, a
judgment was entered against him in Los Angeles Superior Court.
Patterson acknowledged using the boat to entertain "potential
investors" in an offshore sports book operated by an outfit called
Diamonds Reef Investments. The Nevada firm's other officer, L.A.
accountant Roger Arcaro, filed for bankruptcy protection in July 2005
using the same lawyer who handled Patterson's Chapter 13 petition.
When told that it seemed he fraudulently got control of the boat in
an effort to hoodwink other marks, Patterson replied, "Totally wrong,
that couldn't be any further from the truth. That's like if General
Motors invites someone on their yacht it's to lure them in."
"You're not G.M.," a reporter reminded Patterson.
"Well, no, but last time I looked this was America and you could
market anything any way you wanted to," he answered.
Patterson has exhibited that unique attitude for most of his life,
which he sketched out for TSG. He left college after a semester and
worked at Muncie Chevrolet before moving to Hawaii at 18 to work on a
salvage ship for two years. Upon his return to Indiana, Patterson
said he re-enrolled in Ball State University and eventually got a
Master's degree. Since he planned a career in academia, he took a
teaching post at West Texas State University.
It was there in 1966 that Patterson claimed he was accidentally shot
in the stomach by a couple of joyriding teenagers who stole their
father's car, got liquored up, and began shooting up the
neighborhood. The bullet, he said, shattered his spine and left him
unable to walk for a year. He eventually returned to Indiana where he
taught high school for a year before taking a job as an organizer for
the Textile Workers Union.
While working for the union, Patterson recorded his first two federal
criminal convictions. He was first nailed for trying to extort money
from an employer in return for not organizing its workers. Patterson
said he was sentenced to probation on the "trumped-up charge." His
second conviction, for obstruction of justice, came as a result of
his role in a convoluted insurance fraud scheme orchestrated by two
union members. Patterson, who claimed he pleaded guilty when
prosecutors threatened to indict his wife, said he was sentenced to
90 days in a Salvation Army halfway house.
At that point, he drove a 1972 Monte Carlo west and settled in
Southern California, not far from where he lives today. After working
assembly line jobs at Ford and Chevrolet (where he painted and
wet-sanded Camaros), Patterson said that he no longer "wanted to be a
drone." After jobs with Getty Oil and Occidental Petroleum, he
founded a hazardous waste transportation business and then segued
into the "corrupt" mining business in Mexico for four years.
His Mexican venture ended, Patterson claimed, shortly after he was
kidnapped by "the Secret Service of Mexico" one Easter weekend in the
late 1980s. As Patterson tells it, he was abducted at gunpoint at a
Mexican airport and shoved into a 1968 Impala, where his head was
wrapped in an Ace bandage. "If I picked it up, they blow my fucking
head off," he recalled.
From there, he was transported to a farmhouse outside Mexico City,
where he was severely beaten his first night in custody. His partner
was kidnapped the following night and transported to the same holding
facility where Patterson was incarcerated. Their captors wanted
$500,000 hand-delivered to Mexico City. When the ransom request was
transmitted to Patterson's U.S. representatives, the FBI was
contacted. At a subsequent money-for-prisoners exchange, undercover
law enforcement officers (some of whom, Patterson claimed, were
disguised as nuns and doctors and carried machine guns) jumped some
of the kidnappers. They were told unless the Americans were released,
they themselves would be killed.
Patterson said he and his partner were soon released and the FBI
asked them not to say anything about the episode.
As Patterson convincingly recounts this unbelievable (and surely
fabricated) tale, a visitor can see how he has talked people out of
their money and got a career criminal like Proctor to convict himself.
So when his career retrospective moves on to a subsequent attempt to
launch a Costa Rica-based gambling business that failed when "some
guy ran off with all the money," for a moment a reporter actually
considers that the fleeing man was someone other than Daniel Patterson.
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Received on Sat Mar 02 2024 - 00:57:24 CST