NEW YORK–An Italian businessman once romantically linked to actor Anne Hathaway was arrested yesterday on charges that he ran a fraudulent real estate investment scheme, duping investors by boasting his Vatican connections could get U.S. real estate at bargain prices.
Raffaello Follieri, 29, was waiting to appear in a Manhattan court on 12 counts of conspiracy to commit wire fraud and money laundering.
Hathaway’s publicist, Stephen Huvane, has stressed the star is not part of any investigations and is no longer a board member of the Follieri Foundation.
Follieri was accused in the complaint of portraying himself as the Vatican’s representative in the U.S. to obtain real estate at below-market prices. Prosecutors claim he used those false claims to get money from investors, including millions of dollars from a private equity firm based in California.
According to the complaint, Follieri spent hundreds of thousands of those dollars on privately chartered flights around the world with his girlfriend and others, expensive meals and clothing, a posh apartment in Manhattan and medical expenses.
The girlfriend was not identified, but it is widely reported that Hathaway, star of films The Devil Wears Prada and The Princess Diaries, had until recently dated Follieri.
Follieri claimed the Vatican, according to the FBI, had appointed him to manage its financial affairs, and that he had met with the Pope in Rome. He allegedly told investors that he could obtain Roman Catholic Church properties in the U.S. at bargain prices.
According to the complaint, his connections to the Vatican amounted to meetings with clergy in Italy arranged by an administrative employee whom he paid using money from his principal investor.
Prosecutors said Follieri went to great lengths to embellish the appearance of connections to the Vatican, including using money from the principal investor to hire two monsignors in the U.S. to accompany him during business dealings.
The plan unravelled when the investor sought an audit and demanded an explanation for lavish non-business expenditures.
The partner was not identified in court papers. However, a division of supermarket billionaire Ron Burkle’s Yucaipa has settled lawsuits accusing Follieri of misappropriating more than $1 million. Burkle is a friend of Bill Clinton.
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.
His bail is set at $21 Million.