Raffaello Follieri's fall from grace
Oh, how the mighty have fallen! As it turns out, Raffaello Follieri doesn't exactly qualify as "mighty," but to attain a lavish lifestyle and celebrity girlfriend -- Anne Hathaway -- he dropped some mighty big names... the biggest. His romance with Hathaway fell apart last summer shortly before she helped the FBI put together a case against Follieri that could've gotten him a prison sentence of 265 years.
Here's what Follieri did, according to authorities. In 2003, he arrived in New York, claiming to have inside ties to the Vatican. The Catholic Church, said Follieri, was burdened by the steady stream of litigation costs that arose from sex abuse scandals, and needed to divest itself of some of its unused properties in the United States. As a result, the Church was willing to sell some of its holdings at bargain prices to purchasers who would develop the properties in ways that coincided with the values of the Church, like senior centers. That, said Follieri, was the reason why he and his father, Pasquale, started the Follieri Group in Manhattan.
Follieri easily convinced investors and others that his ties to the Vatican were substantial and included frequent visits to the Pope. To help the charade, he even kept ceremonial robes of senior clergymen in his office, authorities report. These connections and his claims of philanthropic motives were convincing enough to attract not only the attention of Anne Hathaway -- with whom Follieri shared a Fifth Avenue apartment in Trump Towers -- but also some well-known investors like Bill Clinton.
If you Google Follieri, you'll see that even some publications dedicated to covering the Catholic Church touted Follieri as some kind of god of charity. Of course, when the Vatican itself got word of Follieri's claims, representatives denied having any connection with him. After his arrest, authorities found a letter dated in 2006 from a Vatican cardinal, warning Follieri to stop claiming false ties to the church... though that doesn't seem to have slowed him down. At least one church-related publication that sang his praise alludes to the Vatican's displeasure, not as a denial of Follieri's claims, but as a speculation that the Church leadership didn't want to publicize what it was doing.
It's All About Charity
Follieri was quoted in the Pittsburgh Post-Gazette in 2006 saying, "We don't look for the best dollar. We are here to make the best difference in the community." That claim to philanthropic motives may have helped attract big name clients including Bill Clinton and Clinton's wealthy friend, Ron Burkle, who owns an investment company known as Yucaipa. Clinton is a senior adviser to Yucaipa.
According to The Wall Street Journal Online, Clinton was introduced to Follieri through his personal aide, Doug Band. Based on that affiliation, Yucaipa and the Follieri Group formed a joint venture, for which Yucaipa committed to invest up to $100 million. As a bonus, Follieri is said to have guaranteed that he could deliver the Catholic vote for Hillary Clinton, had she won the nomination.
What Went Wrong?
In spite of the connections he claimed to have, Follieri was only successful in buying two unused properties from the Pittsburgh diocese. Meanwhile, he used investor funds to support a lavish lifestyle which included paying $37,500 per month for the Trump Towers apartment he shared with Anne Hathaway. When questions started to arise, Follieri told a TV reporter that, "Neither development companies nor Rome were ever built in a day or with a linear budget."
Unfortunately for Follieri and his investors, before his empire could be "built," the authorities closed in and arrested him on June 24. Charged with 11 counts of fraud and money laundering, his bail was set at $21 million, which he was not able to raise. In one fell swoop, Follieri moved from his apartment -- which measured at least 3,000 square feet and had all the bells and whistles -- to a cell at the Metropolitan Correctional Center that measures closer to 7.5 by 8 feet where the only bells and whistles are security alarms to keep him in.
Six months later, on October 24, Follieri returned to federal court in Manhattan where he was sentenced to 4 1/2 years in prison, and ordered to pay a fine of $1,400. Follieri will serve three years on supervised release at the Fort Dix, New Jersey or the Otisville, New York facility. He'll find out where his new digs will be on December 12th. Based on the charges, Follieri could've been sentenced to 265 years in prison, but was given a lighter sentence in return for giving up his right to appeal.
Outside the court, his attorney, Flora Edwards told reporters that Follieri had lost sight of his purpose. "As with many people, he got sidetracked by the need to adopt a lifestyle he couldn't maintain."
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
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