Legal News

Real Estate Developer (and Anne Hathaway’s Ex!) Nears Plea Deal

By Dan Slater

Remember Raffaello Follieri, the jet-setting, 30-year-old Italian entrepreneur whose exploits in the U.S. included a stint with actress Anne Hathaway? In June, he was charged with conspiracy, wire fraud and money laundering in an alleged real-estate investment scheme that included billionaire Ron Burkle and was designed to fuel Follieri’s lavish lifestyle.

Now, reports the WSJ, Follieri is near an agreement to plead guilty to the fraud and money-laundering charges. Currently in custody in New York in lieu of a $21 million bail, he could face roughly four to five years in prison under the proposed plea agreement, says a person familiar with the matter. Here’s the criminal complaint, and here’s past LB coverage.

The real estate venture was supposed to capitalize on Follieri’s Vatican ties to redevelop surplus Catholic Church properties. Through his relationship with Douglas Band, the top aide to former President Bill Clinton, Follieri met Burkle and persuaded him to form a venture to purchase real estate from the Catholic Church in the U.S.

In addition to the criminal charges, Burkle’s Yucaipa investment operation sued Follieri last year in Delaware state court, accusing Follieri of misappropriating more than $1.3 million from their real-estate venture to finance personal expenses, such as private jets and a Manhattan penthouse. Follieri eventually settled the suit with Burkle.

Full post as published by Law Blog - WSJ.com on September 09, 2008 (boomark / email).