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Actress's Ex Is Charged With Fraud

An Italian businessman who was accused last year by the entrepreneur Ron Burkle of misusing more than $1 million he had put up for investments was arrested on Tuesday and charged with fraud and money laundering.

Raffaello Follieri, who had dated the actress Anne Hathaway, is accused of concocting an elaborate real estate scheme to mislead investors by persuading them that he had a special relationship with the Vatican.

The 29-year-old Mr. Follieri went so far as to claim that he visited the pope whenever he was in Rome, according to the 12-count complaint that was unsealed on Tuesday in Federal District Court in Manhattan.

Judge Henry B. Pitman set bail at $21 million, to be secured by $16 million in cash and property and guaranteed by five financially responsible persons. Mr. Follieri had to surrender all travel documents and was ordered confined to his home in Manhattan with the exception of legal, religious and medical needs. Any trips must be made with an electronic-monitoring device.

After his court appearance, Mr. Follieri, who was said to be suffering from a sinus infection, had what his publicist, Melanie Bonvicino, called “some sort of attack,” and was taken to a hospital, according to The Associated Press. No further information on his condition was available.

According to the complaint, Mr. Follieri, the chairman and chief executive of the Follieri Group, told investors that as a result of his relationship with the Vatican, he was able to buy properties from the church at below-market prices and that he had right of first refusal on any properties that the church sold in the United States.

He also said that the Vatican had formally appointed him to manage its financial affairs, the complaint said. The government said that Mr. Follieri had no such connection to the church. In fact, the complaint says, Mr. Follieri had no special rights in terms of buying properties but was simply competing against other bidders.

While Mr. Burkle’s investment company, Yucaipa, is not identified in the complaint, it does say that Mr. Follieri raised money to invest in the scheme from a “certain private equity firm.” Last year, Yucaipa sued Mr. Follieri in Delaware Chancery Court, contending that Mr. Follieri had used for his personal benefit $1.3 million of the money that it had invested .

At that time, the company had put up more than $55 million in the Follieri Group. Frank Quintero, a spokesman for Yucaipa, declined to comment on the complaint. A spokeswoman for the United States attorney’s office declined to confirm that the firm was Yucaipa.

The Follieri Group settled the Yucaipa lawsuit a month ago, according to a person briefed on the resolution but not authorized to speak publicly.

Mr. Follieri, who came to the United States from Italy in 2003, quickly cut a wide swath. Attractive and charming, he rapidly moved into the world of billionaires and political figures. His entree was helped when he met and befriended Douglas Band, a top aide to Bill Clinton who brought Mr. Follieri into contact with the former president and Mr. Burkle.

Mr. Follieri received an onstage thanks from Mr. Clinton after pledging $50 million to the Clinton Global Initiative. The money has not been paid.

Mr. Follieri’s business cachet — his link to the Catholic Church — was contrived, the government said. It consisted of an administrative employee at the Vatican whom he paid.

Mr. Follieri also hired a relative of a former Vatican official as well as his own father, claiming that his father had a special relationship with the Vatican. In an apparent effort to build ostensible ties to the church, Mr. Follieri also met with clergy and traveled with a monsignor.

The complaint also contends that instead of making investments, Mr. Follieri used the money he raised to indulge in a lifestyle that included the perquisites of the wealthy: a Manhattan apartment overlooking Rockefeller Center, for which he paid $37,000 a month; a house call by his doctor that cost $30,000 and medical expenses for his parents and his girlfriend at the time. The money also went to dog-walking services, vacations and flights on chartered jets, the complaint contends.

Though she is not identified, Ms. Hathaway, the young star of “The Devil Wears Prada,” had been dating Mr. Follieri. They broke up recently, according to news reports.

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