From http://www.cnn.com/2008/US/06/24/follieri.arrested.ap/
updated 10:23 p.m. EDT, Tue June 24, 2008
Hathaway's ex arrested on fraud charges
Prosecutors: Raffaello Follieri posed as Vatican representative to fleece investors
They allege that Follieri, 29, spent investor's money on lavish things
FBI: Follieri said Vatican had formally appointed him to manage its financial affairs
Follieri recently dated actress Anne Hathaway
NEW YORK (AP) -- An Italian businessman who once dated actress Anne Hathaway was arrested Tuesday on charges he posed as a representative of the Vatican to fleece wealthy investors in a real estate company that sought to buy and redevelop Roman Catholic Church property.
Raffaello Follieri is accused of fleecing wealthy investors and spending their money improperly.
Bail was set at $21 million for Raffaello Follieri. Federal prosecutors said they have overwhelming
evidence that he improperly spent up to $6 million from investors, much of it on a lavish lifestyle, including privately chartered jet travel with his girlfriend and others, expensive meals and clothing and a posh Manhattan apartment.
The girlfriend was not identified but it has been widely reported that Hathaway, the star of films including Get Smart,
The Devil Wears Prada
and The Princess Diaries,
had until recently dated Follieri, 29.
An angry Follieri repeatedly interrupted his lawyer at a court appearance to tell her what to say. He shook his head at times and, as a prosecutor accused him of owing various debts, called out: We paid that.
After his court appearance, Follieri, who had been fighting a sinus infection, had some sort of attack
and was taken to a hospital, said his publicist, Melanie Bonvicino. She said she did not have further information on his condition.
Prosecutor Reed Michael Brodsky said Follieri, of Foggia, Italy, boasted of tight Vatican connections to entice investors to give millions of dollars so he could live the lifestyle of a multimillionaire.
He said Follieri had duped one investor as recently as last month.
In short, your honor, he is a con man, and he was able to defraud a lot of people out of a lot of money over a long period of time,
Brodsky told Magistrate Judge Henry B. Pitman. The evidence in this case is overwhelming because he left a trail of evidence.
Brodsky had asked Pitman to deny bail, saying Follieri had the money, the connections and the incentive to flee charges that could send him to prison for up to nine years if he is convicted. He said Follieri lost between $2.5 million and $6 million of investor money.
Pitman said Follieri must secure bail with $16 million in cash or property and must endure home detention, except for legal meetings, medical treatment or religious services.
The complaint filed in U.S. District Court in Manhattan alleges that Follieri duped a partner into investing millions of dollars in a real estate scheme to buy properties at bargain prices from the Catholic church in the United States and redevelop them.
The partner, a private equity firm in California, was not identified in court papers. However, a division of supermarket billionaire Ron Burkle's Yucaipa Cos. has settled lawsuits accusing Follieri of misappropriating more than $1 million to support a fancy lifestyle.
Follieri was charged with a dozen counts of wire fraud conspiracy, wire fraud and money laundering.
His lawyer, Flora Edwards, told The Associated Press, We're going to move forward and hope for a speedy resolution to this matter.
Outside court, she called the bail package one of the stiffest she had seen.
Edwards told the judge her client was no threat to flee just because he had access to millions of dollars and his family is in Italy. She noted that his mother was being treated at a hospital in Manhattan.
According to the FBI, Follieri claimed the Vatican had formally appointed him to manage its financial affairs and that he had met with the pope in person in Rome.
He is accused of keeping various ceremonial robes, including the robes of senior clergymen, in his Manhattan office, and of hiring two monsignors to accompany him during his business dealings.
Once, according to the complaint, he even asked a monsignor to change out of his robes and put on the robe of a more senior clergyman to create the false impression that Follieri had close ties to the Vatican.
The monsignors are not accused of any crimes. Messages for comment left for Archbishop Pietro Sambi, the Vatican's U.S. ambassador, and the U.S. Conference of Catholic Bishops, were not immediately returned Tuesday.
Prosecutors allege that Follieri's scheme unraveled when the principal investor sought an audit of the partnership and demanded an explanation for expenditures unrelated to administrative overhead or business expenses.
Earlier this month, the New York attorney general's office said it was investigating a foundation operated by Follieri that vaccinates children in Third World countries.
The Follieri Foundation has not filed U.S. tax disclosure forms required from charities, according to a review of records by the AP.
Hathaway's publicist, Stephen Huvane, has previously stressed that she is not part of any probes and is no longer a board member of the Follieri Foundation.
And from Catholic World News:
http://www.cwnews.com/offtherecord/offtherecord.cfm?task=singledisplay&recnum=4777
one born every minute
Posted by: Diogenes - Jul. 16, 2008 11:26 AM ET USA
Just before he was indicted, Raffaello Follieri-- who is either a real-estate entrepreneur or a con artist, depending upon your perspective-- arranged to buy a home from Bishop Joseph Galante of Camden, New Jersey. It was the bishop's own property, so he was free to dispose of it as he saw fit. There seems to be nothing improper about the transaction. Still you might wonder why the high-flying Follieri, who was enticing billionaire partners into his big development schemes, would bother purchasing an ordinary townhouse in New Jersey.
Maybe we can solve that mystery. Follieri was interested in doing business with American bishops. That's why he and a partner, Andrea Sodano (remember that name) set up hospitality suites in the hotels where the US bishops held their annual meetings. The big-money business plan for the Follieri Group was to buy up all the church properties that went on the market when parishes closed, develop those properties, and sell them at a profit. Obviously the scheme would work only if Follieri could buy the properties at attractive prices, and that's why he was courting the bishops' favor.
Most American chancery officials evidently recognized the Follieri scheme for what it was. Despite aggressive pursuit of deals in many different dioceses, the playboy financier was only able to purchase a few church properties before his partners began asking questions about where their money had gone, and learning that much of it had apparently gone to underwrite Follieri's jet-set lifestyle. That was the beginning of the end for the Follieri Group's adventure in American real estate.
Why did Follieri think he might get special treatment from American dioceses? That's where his partner, Andrea Sodano, comes into the story. Sodano is an engineer, whose role theoretically was to help guide the reconstruction efforts after properties had been purchased. You might wonder why an engineering consultant was chosen to help Follieri chat up the US bishops. But you'd probably stop wondering when you learned that Andrea Sodano's uncle, Cardinal Angelo Sodano, was at the time the Vatican Secretary of State.
Cardinal Sodano never commented on his nephew's business dealings, and other Vatican officials assured journalists that the Holy See had no special relationship with the Follieri Group. But that didn't stop Follieri from dropping hints about his ties to the Vatican-- and persuading some people, including the Clinton campaign.
And Bishop Galante, too, the New York Post reports:
Spokesman Andrew Walton said Galante initially met with Follieri at the encouragement of the Vatican and had no idea he was dealing with a con man until two months after he finalized the sale of his beach house.
Walton said the diocese got a phone call from an office of the Vatican through the bishop's office and we were asked to be open to dealing with the Follieri Group. We and other dioceses were encouraged to use Follieri where we could.
Interesting. Very interesting. If the bishop's spokesman is to be believed-- and we see no reason not to believe him-- then someone at the Vatican was placing phone calls in support of the Follieri scam. Wouldn't you like to know who it was?