Man Promised to Redevelop Churches in Pittsburgh Area, Diocese Says
ThePittsburghChannel
June 24, 2008
http://www.thepittsburghchannel.com/news/16699712/detail.html
TPITTSBURGH — Police arrested an Italian businessman on Tuesday who once dated a Hollywood star and was accused of lying about connections to the Vatican to allegedly fleece wealthy investors in a real estate company that sought to buy and redevelop Roman Catholic Church property.
Raffaelo Follieri, actress Anne Hathaway's ex-boyfriend, faces fraud charges for squandering millions of dollars meant to redevelop church properties — including several in the Pittsburgh area.
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Authorities said Follieri spent millions of dollars on a lavish lifestyle with Hathaway. Federal prosecutors said Follieri promised to spend the money to redevelop rundown churches in places like McKeesport and Tarentum.
The allegations against Follieri first surfaced in a lawsuit filed by billionaire Penguins owner Ron Burkle, who financed Follieri's church-buying venture, Team 4's Paul Van Osdol uncovered last year.
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.
Among the churches bought by Follieri's company include St. Stephen in McKeesport and St. Clement in Tarantum. He also agreed to buy St. Canice in Knoxville and historic St. Nicholas on the North Side, but he never closed on those deals.
According to the criminal complaint, Follieri spent little on redeveloping churches but millions on luxuries like this 600,000-square-foot penthouse apartment in Manhattan that features views of Central Park and the Empire State Building.
Follieri's lawyer, Flora Edwards, told The Associated Press, "We're going to move forward and hope for a speedy resolution to this matter." Otherwise, she declined to comment.
Follieri, 29, is also accused of spending thousands on Hathaway, taking her to five-star restaurants and hotels, flying her overseas on private jets and buying gifts from designer stores.
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.
Prosecutors allege that Follieri embellished his slim connections to the Vatican to make it seem he was so powerful that the Catholic church would sell him property at a deep discount.
Last year, the Rev. Ron Lengwin, a spokesman for the Pittsburgh Diocese, said they regretted doing business with Follieri.
"This was a perfect kind of agreement for us that we could enter into and the fact that it's failed, yes that's disappointing to us," he said.
Follieri 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.
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.
The criminal complaint does not name Hathaway. Her publicist said Hathaway is not part of any criminal investigation. She is reported to have broken up with Follieri in the past few weeks, Van Osdol reported.
Hathaway has starred in movies including "The Devil Wears Prada" and "The Princess Diaries."
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.
Follieri faces wire fraud, conspiracy and money laundering charges.
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