Guilty Plea in Vatican Real Estate Scheme

By CHRISTINE HAUGHNEY
www.nytimes.com
September 11, 2008

An Italian businessman who parlayed a handful of Vatican ties into financial backing from the billionaire Ron Burkle, social ties to former President Bill Clinton and a highly publicized romance with the movie actress Anne Hathaway, watched his ambitions draw to a close Wednesday when he pleaded guilty to real estate fraud.

Appearing in Federal District Court on Wednesday, the businessman, Raffaello Follieri, 30, pleaded guilty to 14 counts of wire fraud, money laundering and conspiracy. He is scheduled to be sentenced on Oct. 3.

Dressed in navy blue prison clothing, Mr. Follieri appeared unshaven and in need of a haircut. His sentencing was initially scheduled for Dec. 12, but his lawyer, Flora Edwards, asked the judge for an earlier date because Mr. Follieri was having “a very difficult time” in the Metropolitan Detention Center.

In the original indictment, prosecutors accused Mr. Follieri of getting millions of dollars from investors by fraudulently asserting that his connections with the Vatican allowed him to buy church properties.

Instead, he used the money to finance a lavish lifestyle including a $37,000-a-month apartment, meals and clothing.

Mr. Follieri’s descent from Manhattan’s highest social perches began earlier this summer when he was arrested at his Trump Tower rental apartment just days after Ms. Hathaway broke off their relationship.

When he could not make his $21 million bail, Mr. Follieri, who was a regular at restaurants like Nobu and Cipriani, found himself confined to a cell at the Metropolitan Detention Center.

In 2007, his business relationship with Mr. Burkle had disintegrated into lawsuits and Mr. Clinton’s staff has distanced themselves from him.

“He’s a con artist,” said Paolo Zampolli, an Italian modeling agency owner who knew Mr. Follieri socially and long had questioned Mr. Follieri’s ties to the Vatican. “He deserves what he gets.”

http://www.nytimes.com/2008/09/11/business/11fraud.html?_r=1&ref=business&pagewanted=print&oref=slogin