Celebrity Con Man Pleads Guilty

Raffaello Follieri -- actress Anne Hathaway's former boyfriend and billionaire Ron Burkle's former business partner -- pleaded guilty today in Manhattan federal court to conspiracy, wire fraud, and money laundering charges.

Follieri, 30, was renown for two things: a lavish lifestyle, often appearing with the Princes Diaries starlet on his arm, and his claim that connections in the Vatican gave him first right of refusal to purchase Catholic Church properties in the U.S. at below-market prices.

He said the Vatican had appointed him its chief financial officer and boasted that he met with the Pope when he was in Rome.

Prosecutors, however, said those claims were false and accused Follieri of having netted more than $2 million by defrauding investors.

In fact, prosecutors said, Follieri's Vatican connections were strictly small fry -- an administrative employee whom he paid with investor funds, and a relative of a former Vatican official.

In March 2006, the Vatican's secretary of state warned him in writing that he should stop claiming he had ties to the Vatican. Rather than tell the truth, Follieri, chairman and chief executive officer of the Follieri Group in Manhattan, used investor money to underwrite his lavish lifestyle, prosecutors said.

On the luxury list: flowers, cosmetics, wine, custom-made clothes, dinners, dog walking services, and vacations for himself, his parents, and Hathaway -- in addition to renting a yacht and a luxury apartment in Manhattan.

He also used $18,200 in investor funds to settle a lawsuit over expenses incurred during a vacation with Hathaway, according to the U.S. Attorney for the Southern District of New York.

U.S. Attorney Reed Brodsky said Follieri, of Foggia, Italy, falsely claimed he had exclusive rights to acquire church properties for redevelopment.

Last year, Follieri tangled with Burkle's company, Yucaipa, which accused him of misappropriating some $1.3 million -- but not in connection with his alleged Vatican land deals -- and using it to underwrite his lavish spending.

That case, filed in Delaware, was settled privately.

At his court appearance today, Follieri admitted he knew that he did not have investor authorization to pay for personal expenses. He appeared before U.S. District Court Judge John G. Koeltl to plead guilty to a total of 13 counts, including wire fraud and money laundering.

He was arrested in June, and remains in jail pending sentencing on Oct. 3.

He faces a maximum of 265 years in prison. He also faces fines of hundreds of thousands of dollars -- which has yet to be determined.

He already agreed to forfeit $2.44 million plus a dozen (presumably expensive) watches and nine pieces of jewelry -- some of which may have been turned over by Hathaway.

Among the timepieces to be surrendered are one Rolex, a Bucherer, a Cartier, an Ebel, two Audemars Piguet -- and one Donald Trump watch.

by Elizabeth Olson

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