By Tony Allen-Mills
The Times (United Kingdom)
June 30, 2008
http://entertainment.timesonline.co.uk/tol/arts_and_entertainment/film/article4232020.ece
It should have been a highlight of Anne Hathaway's increasingly impressive Hollywood career. Her new film, Get Smart, shot to the top of the US box office rankings last weekend. The 25-year-old actress gaily proclaimed in a magazine interview that she was happy as a clam and house-hunting with her Italian boyfriend, Raffaello Follieri. "I enjoy living with him so much," she gushed.
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By Wednesday the romance was over, Follieri was in a New York jail and the star of such films as The Devil Wears Prada and The Princess Diaries was struggling to avoid the celebrity limelight that only a few days earlier she had been assiduously courting.
Follieri's arrest on charges of fraud, conspiracy and money-laundering has confronted Hathaway with every Hollywood celebrity's nightmare: at just the moment she is expected to make herself publicly available to promote her latest film, her private life has blown up in her face.
Nor was Hathaway the only celebrity to be scarred last week by the fallout from a startling international property scandal whose list of characters includes the former president Bill Clinton; John McCain, the Republican presidential candidate; a Vatican cardinal and several monsignors; and, at the centre of it all, a flamboyant Italian would-be entrepreneur who had planned to celebrate his 30th birthday with Hathaway yesterday at their favourite restaurant on the island of Capri.
Instead, Follieri was chowing down at the Metropolitan correctional centre after a New York judge set bail at $21m (£10.5m) – one of the highest amounts ever imposed for an alleged white-collar crime. Follieri is accused of lying to investors about his activities and lavishing their money on a jet-setting lifestyle that included trips by private jet with Hathaway and a $37,000-a-month apartment in Trump Tower, Manhattan.
Follieri's fall has raised awkward questions about his links to prominent political figures. One photograph emerged last week of Clinton with his arm around Follieri as they attended a party at the Dominican Republic home of Oscar de la Renta, the fashion designer. It has also emerged that Follieri entertained McCain in 2006 on board a rented yacht moored in the Adriatic off the coast of Montenegro.
The young businessman's high-ranking connections have added a volatile dimension to an otherwise familiar saga of an alleged property scam in which investors hoping to "get rich quick" found that their funds were being used to finance gilded jaunts to Rome and St Tropez.
It all started with sex, although not the kind that is usually portrayed in Hollywood blockbusters. A flood of lawsuits claiming sexual abuse by American priests forced Catholic authorities in America to consider selling off part of their extensive property holdings to finance multi-million-dollar settlements.
Follieri arrived in New York in 2003 claiming to have extensive contacts with Vatican officials who would help him to purchase redevelopment properties at favourable prices. According to an 18-page criminal complaint filed by New York prosecutors last week, Follieri at one point claimed to be the Vatican's "chief financial officer", a position that does not exist.
He is also said to have paid lowly church officials to dress up in Vatican robes to make it appear that he was well connected. His main contact in Rome is said by prosecutors to be the nephew of a retired cardinal.
By 2005 Follieri had made contact with Douglas Band, a former White House intern who had risen to become a close personal aide to Clinton. According to reports in both Italian and US newspapers last year, Follieri paid Band $400,000 for an introduction to Ronald Burkle, a California-based billionaire investor and close friend of the former president. Band, 35, has since acknowledged the payment but says he did not keep it.
The introduction produced a $100m deal between Follieri and Burkle's Yucaipa Companies, an investment firm in which Clinton had taken up a lucrative job as partner and senior adviser after he left the White House. The new team spent about $40m on a dozen Catholic properties, but the deal collapsed last year when Yucaipa accused Follieri of lavishing at least $1.3m of its money on his luxurious lifestyle. Michael Cooper, a multi-millionaire Canadian investor, also demanded his money back.
The Yucaipa case was eventually settled, and Hathaway stood by her beleaguered boyfriend, despite continuing reports that his businesses were in trouble. At one point the couple travelled together to Central America, where Follieri had set up a charity offering free vaccinations.
Earlier this year Follieri was briefly arrested for writing a $215,000 cheque that bounced (he later produced the funds to cover it). Then the New York state prosecutor's office was reported to be investigating Follieri's charity, which allegedly failed to file required financial statements. Hathaway was formerly on the charity's board but there is no suggestion she was aware of any wrongdoing.
Exactly why and when she decided to dump him is likely to remain unknown, but the relationship appears to have ended days if not hours before Follieri's arrest. A spokesman for Hathaway said last week: "It is highly unlikely we will ever comment."
Yet some of Follieri's former business partners may not be rid of him so easily. Follieri's links to Clinton and Band are likely to feature in a future trial. It remains unclear exactly what he discussed with McCain, but aides to the Arizona senator insist the encounter was entirely social and nothing came of it.
Perhaps the most surprising aspect of the Follieri affair is not that he wooed a Hollywood starlet – many who know him attest to his charm – but that he managed to rub shoulders with two of America's most experienced politicians. How did an unknown Italian businessman peddling suspect property schemes get close enough to Clinton and McCain to party in the Caribbean with one and in the Adriatic with the other?
"He is a conman," declared Reed Brodsky, a federal prosecutor in the case. "He was able to deceive everyone from the most sophisticated investor to the most naive person."
Video: Anne Hathaway's boyfriend found guilty of fraud
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