Bankrupt Banker: Follieri Group

Raffaello Follieri, 30, pleaded guilty to 14 counts of wire fraud, money laundering and conspiracy.

Raffaello Follieri, 30, pleaded guilty to 14 counts of wire fraud, money laundering and conspiracy. He had used his contacts to attract investors to real estate ventures.<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAO_HEf2LoQUEq6y-2C2GPRdZ9MzGb5cea-UptizV1U-xkj2xlu-rgGDFb6Zl9scJj7rOQ8GmMgDNHkMFIbQ-o7NbAkTC7T5nAiDSBoAusiENUtqb7dG6_FAvfAK3aFGz6O6dgd_fjjFfp/s1600-h/folli.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5245287694963172050" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAO_HEf2LoQUEq6y-2C2GPRdZ9MzGb5cea-UptizV1U-xkj2xlu-rgGDFb6Zl9scJj7rOQ8GmMgDNHkMFIbQ-o7NbAkTC7T5nAiDSBoAusiENUtqb7dG6_FAvfAK3aFGz6O6dgd_fjjFfp/s400/folli.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a>He is scheduled to be sentenced on Oct. 3. Under the plea bargain, he has agreed not to appeal any sentence that is less than five years and three months. <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikeSaGTz5GX3zWaJrgdomwDa4qppX0gImwI5fVqz_QKYrTu9G7z8r3q72mmuFYNVO2ej9_-xsFqWgMCRvGbubFdsnF0cTd1PtHM1I7P4BE82LFUNTeDdhKcj817vjBm5axO9bFeyrsm2Ix/s1600-h/follieri_hathaway240.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5245287699206412418" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikeSaGTz5GX3zWaJrgdomwDa4qppX0gImwI5fVqz_QKYrTu9G7z8r3q72mmuFYNVO2ej9_-xsFqWgMCRvGbubFdsnF0cTd1PtHM1I7P4BE82LFUNTeDdhKcj817vjBm5axO9bFeyrsm2Ix/s400/follieri_hathaway240.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a>The plea requires Mr. Follieri to give up $2.4 million, 12 watches and 9 pieces of jewelry. The watches included a Rolex, a Cartier, a Harrods and a Donald Trump. The jewelry included a gold-colored ring with light blue-green stone, a pair of silver earrings with silver clasps and blue and clear stones, a 16-inch five-strand necklace with pearl beads, and a 32-inch gold-colored chain with a red-brown stone and gold-colored tassel. The jewelry is believed to have been Ms. Hathaway’s. Dressed in navy blue corrections department 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, saying that Mr. Follieri was having “a very difficult time” in the Metropolitan Detention Center. In the indictment, prosecutors accused Mr. Follieri, the chairman and chief executive of the Follieri Group, of getting millions of dollars from investors by claiming that his connections with the Vatican allowed him to buy church properties at below-market prices and redevelop them for “socially responsible” purposes. Mr. Follieri had no special rights in terms of buying properties but was simply competing against other bidders, the indictment said.Instead, the government said, he used money he received from investors to finance a lavish lifestyle including a $37,000-a-month apartment, meals and clothing. The charges accused him of misusing more than $2 million.Mr. Follieri’s descent from Manhattan’s highest social perches began this summer when he was arrested at his Trump Tower apartment just days after Ms. Hathaway broke off their relationship. After failing to post a $21 million bond for bail, Mr. Follieri, who was a regular at restaurants like Nobu and Cipriani, found himself in a jail cell.“He’s a con artist,” Paolo Zampolli, who works in real estate development and knew Mr. Follieri socially, told The Times. “He deserves what he gets.”In addition to the claims about his Vatican ties, the key to Mr. Follieri’s scheme was his ability to ingratiate himself in Manhattan social circles, which led to introductions to wealthy and powerful investors.When Mr. Follieri arrived in Manhattan in 2003, he lived like many new transplants to Manhattan. He asked to stay with friends as he started his venture.Early on, the calling card he used to arrange meetings was his claim that Andrea Sodano, the nephew of Cardinal Angelo Sodano, the dean of the College of Cardinals, was working for his company. According to court records and testimony at his plea hearing, Mr. Follieri repeatedly told people that he was appointed as chief financial officer to the Vatican and that he met with the pope when he visited Rome. In a letter from March 8, 2006, which was found in Mr. Follieri’s safe after his arrest, Cardinal Sodano asked Mr. Follieri to stop misrepresenting their relationship.Still, some well-connected New Yorkers warmed to him quickly. “He was absolutely charming,” said Richard Ortoli, Mr. Follieri’s former lawyer who allowed him to stay at his home for a couple of months in 2004. He called Mr. Follieri a “perfectly amicable houseguest,” who was “very focused on this church stuff.”Lizzie Grubman, a publicist in Manhattan who said that she knew Mr. Follieri by seeing him at social gatherings, told The Times that people like Mr. Follieri showed up at New York parties and charity events until they appeared recognizable. Such people, she said, charm others with symbols of wealth: bottle service at clubs, lavish vacations and private jets.“The game he played was not unique. It’s been done before,” Ms. Grubman told The Times. “Planes, trains and automobiles are very sexy to anyone who is young.”As he became a regular at parties, Mr. Follieri met Ms. Hathaway, and the two started dating in 2004.But even then, associates were starting to question Mr. Follieri’s venture. Jeff Suchman, a real estate consultant who worked with Mr. Follieri in 2004, told The Times in an interview that he had tried to advise him on the properties that the Brooklyn archdiocese was selling.“First, I thought he was fooling himself, and I had this discussion with him. I told him that his business plan was flawed,” he told The Times. It became apparent, Mr. Suchman said, that Mr. Follieri could not carry out his development plans.Mr. Suchman later sued Mr. Follieri for not paying consulting fees; the pair eventually settled.In 2005, however, a former assistant introduced Mr. Follieri to Aldo Civico, director of the Center for International Conflict Resolution at Columbia University. Mr. Civico, in turn, put him in touch with an official at the Clinton Foundation. At an April 12, 2005, meeting at the Palace Hotel, Mr. Follieri met Douglas Band, an adviser to Mr. Clinton, and Mr. Burkle. Afterward, Mr. Follieri agreed to fly to Los Angeles for more discussions with Mr. Burkle; through him, he moved into a Park Avenue office affiliated with Mr. Burkle’s Yucaipa Companies. Mr. Burkle gave his company more than $100 million to invest in joint ventures. In 2007, his business relationship with Mr. Burkle had disintegrated into lawsuits, and Mr. Clinton’s staff members distanced themselves from him. In April of that year, Mr. Burkle sued Mr. Follieri for misappropriating at least $1.3 million. Without Mr. Burkle’s financial support, Mr. Follieri’s relationships with other backers quickly unraveled. He was eventually arrested on fraud charges. At his hearing on Wednesday, Mr. Follieri repeated for an hour the phrase “yes, your honor” to charges that he knew what he was doing was wrong. His voice grew softer when he uttered the words “guilty” to the 14 charges.

Raffaello Follieri, 30, pleaded guilty to 14 counts of wire fraud, money laundering and conspiracy.

Raffaello Follieri, 30, pleaded guilty to 14 counts of wire fraud, money laundering and conspiracy. He had used his contacts to attract inve...