Legal News

Real Estate Developer (and Anne Hathaway?s Ex!) Hit With Indictment

By Dan Slater

Raffaello Follieri — an Italian businessman whom tabloid readers will recognize as the ex-boyfriend of actress Anne Hathaway — was arrested Tuesday, according to a WSJ report by Chad Bray. He was charged with conspiracy, wire fraud and money laundering in an alleged real-estate investment scheme designed to fuel his lavish lifestyle. The complaint was unsealed in Manhattan federal court.

Last year, supermarket heavy Ron Burkle sued Follieri, the CEO of Follieri Group, in Delaware Chancery Court for allegedly misappropriating $1.3 million from Burkle’s private equity firm, Yucaipa. It seems that this federal complaint is based on similar conduct.

According to the criminal complaint, Follieri allegedly told investors he had close ties to the Vatican and could obtain properties owned by the Roman Catholic Church at below-market values for redevelopment. He also allegedly told investors that the Vatican formally appointed him to manage its financial affairs. Prosecutors say Follieri obtained “millions of dollars in investment money” from a private-equity firm in California based on these misrepresentations. (Yucaipa is based in L.A., though a spokeswoman from the U.S. attorney’s office in Manhattan declined to name the PE firm or confirm whether it was Yucaipa.)

Follieri, according to prosecutors, allegedly misused investor money to fund, among other things, an “opulent apartment overlooking Rockefeller Center with views of Central Park” (rent: $37K/month), cleaning services for the apartment ($60K), furniture ($37K), personal vacations, chartered flights on private planes around the world and medical expenses for himself, his parents and his girlfriend at the time. Prosecutors wouldn’t confirm that the girlfriend in question was Hathaway (”The Devil Wears Prada”), who, according to news reports, recently broke up with Follieri.

Full post as published by Law Blog - WSJ.com on June 24, 2008 (boomark / email).