Raffaello Follieri, the 30-year-old Italian entrepreneur who has attracted attention for business dealings with billionaire Ron Burkle, is near an agreement to plead guilty to fraud and money-laundering charges in his federal criminal case, according to people familiar with the matter.
Mr. Follieri was charged in June with paying for a lavish lifestyle with money from a real-estate venture with Mr. Burkle’s Yucaipa Cos. The venture was supposed to capitalize on Mr. Follieri’s Vatican ties to redevelop surplus Catholic Church properties. Currently in custody in New York in lieu of a $21 million bail, he could face roughly four to five years in prison under the proposed plea agreement, says a person familiar with the matter.
A court hearing on his case could take place as early as Tuesday. In a recent court filing, prosecutors said plea negotiations were being conducted in connection with the 12-count criminal complaint filed in June that charges Mr. Follieri with fraud in his business venture with Mr. Burkle.
Mr. Follieri is weighing whether to enter a guilty plea, say people familiar with the matter. There remains a possibility Mr. Follieri could decide to go to trial.
A plea agreement would climax an improbable business saga. Arriving in the U.S. as a little-known but charming twenty-something in 2003, Mr. Follieri became friendly with Douglas Band, the top aide to former President Bill Clinton. That helped Mr. Follieri navigate into the upper reaches of Mr. Clinton’s world, and meet Mr. Burkle. He persuaded Mr. Burkle to form a venture to purchase real estate from the Catholic Church in the U.S.
Soon, he was flying on private jets, vacationing on Mediterranean yachts and sharing a $37,000-a-month Manhattan penthouse with his then-girlfriend, actress Anne Hathaway. He hosted John McCain, now the Republican presidential nominee, on a rented yacht off the coast of Montenegro and looked at possible business deals with a consulting firm partly owned by a top McCain presidential-campaign adviser.
Mr. Follieri’s tale began to unravel last year when Mr. Burkle’s Yucaipa investment operation filed a lawsuit in Delaware state court that accused the Italian of misappropriating more than $1.3 million from their real-estate venture to finance personal expenses, such as private jets and a Manhattan penthouse.
Mr. Follieri eventually settled the suit with Mr. Burkle. In a seemingly remarkable recovery, Mr. Follieri earlier this year found a new investor to reinvigorate his business operation. Federal agents arrested him June 24 and filed criminal charges that, in many respects, resembled those in the civil suit he had settled with Mr. Burkle.
Actress Anne Hathaway, left, with former boyfriend Raffaello Follieri, who is said to be near a deal to plead guilty to fraud and money-laundering charges.
Mr. Follieri’s move toward a guilty plea comes despite some potential problems with the government’s case. While prosecutors contend that Mr. Follieri overstated his Vatican ties to attract investors to his church real-estate deals, he did have some high-level connections in Rome. Last year, a Clinton spokesman said at least two senior Catholic Church figures had spoken up for Mr. Follieri, including Cardinal Angelo Sodano, who, as Vatican secretary of state, effectively ran church operations before retiring last year. Cardinal Sodano couldn’t immediately be reached. He has in the past declined to comment.
Mr. Follieri’s Vatican ties also allegedly involved money. The federal criminal complaint says between 2005 and 2006, Mr. Follieri sent more than $385,000 of allegedly stolen funds to unnamed Vatican recipients “in order to increase his ties” there.
Another odd aspect to the case: the alleged principal victim, Mr. Burkle, had patched things up with Mr. Follieri. Before Mr. Follieri’s arrest, the two men had socialized and examined at least one possible business deal, which didn’t come to fruition, say people familiar with the matter. While Mr. Burkle’s Yucaipa operation sued Mr. Follieri for allegedly misusing the venture’s money, Yucaipa officials never maintained that they were deceived by his Vatican claims. The venture bought some $50 million of properties and Yucaipa officials have consistently said they are satisfied with the portfolio.
Mr. Burkle’s firm was contacted by federal officials looking for information about Mr. Follieri. At one point, Mr. Burkle told Mr. Follieri to be sure that his financial affairs, such as tax matters, were in order, says a person say familiar with the matter. Mr. Follieri was concerned enough that he consulted attorneys, says Melanie A. Bonvicino, a New York publicist and longtime Follieri friend. Ms. Bonvicino has been trying to help him and has visited him in prison.
Source
WENN
