Hathaway ex gets 4 1/2 years in scam

October 23, 2008 6:06:09 PM PDT
Actress Anne Hathaway's former boyfriend was sentenced Thursday to 4½ years in prison for cheating investors of millions of dollars by claiming he had Vatican connections that enabled him to buy Roman Catholic Church property at a discount. "I dishonored my family name and embarrassed the church I love I'll never be able to wash away that stain, and I will have to live with it the rest of my life," Raffaello Follieri, 30, said through an Italian interpreter before he was sentenced. "I just hope someday those who have been hurt by my actions can forgive me."

U.S. District Judge John G. Koeltl said Follieri had engaged in a significant fraud that hurt investors, will financially ruin him and will cause him to be deported after his prison term. The judge also cited Follieri's "lavish personal expenditures," which prosecutors have said were financed with his investors' money.

Follieri said he started off with good intentions, determined to run an honorable business.

"Instead, I made some terrible mistakes," he said. "I always thought I could repair the wrongdoing, but I was wrong."

But Assistant U.S. Attorney Reed Brodsky said Follieri had lied about his education, his background, his wealth and his Vatican connections from the moment he solicited investors through his real estate business, the Follieri Group.

Those investors included Yucaipa Cos., which is controlled by supermarket billionaire Ron Burkle, a close friend of former President Clinton.

Follieri agreed to forfeit $2.4 million when he pleaded guilty last month to conspiracy to commit wire fraud and money laundering.

Koeltl ordered Follieri Thursday to forfeit 15 watches and other precious metals and jewelry. The judge said he would impose a substantial amount of restitution at a future date.

Prosecutors have said Follieri falsely claimed he was the Vatican's chief financial officer and showed at least one business contact a phony letter Pope John Paul II purportedly wrote to him in 2002.

Follieri spent millions of dollars of investors' money on personal expenses, including flowers, cosmetics, clothes, wine, expensive dinners, dog-walking services, yacht rentals, a $37,000-a-month Manhattan condo and vacations for himself, his parents and Hathaway, prosecutors said.

They said he even he used $18,200 of investors' cash to settle a lawsuit over expenses he ran up on vacation with the "Get Smart" and "The Devil Wears Prada" star. The two dated for four years, until shortly before his arrest in June.

Defense lawyer Flora Edwards has pinned Follieri's troubles on his acquaintances with movie stars and celebrities, saying in court papers that he "became intoxicated with it all."

"Unfortunately, he lacked the resources to maintain the opulent lifestyle of his new friends," she wrote.

Edwards asked that Follieri be sentenced to three years in prison, even though he had agreed to serve at least four years and three months when he entered his guilty plea.

She noted that more than 100 letters had been written on his behalf, and she said his charitable acts and a gravely ill mother were reasons to lighten his sentence.

But Brodsky argued that Follieri made his charitable contributions with money he had stolen from investors and lied about his intentions almost from the moment he arrived in the United States six years ago, at age 24.

Prosecutors also criticized Follieri for including pictures of himself with the pope and other clergymen in arguing for a lighter sentence, even though his claims of Vatican ties were the foundation of his fraud.

"Follieri used these same photographs and connections in order to defraud investors," they said.