Original subtitles

Live is a PNVP original.

In this episode of American Greed, 29 -year -old Raffaello Foglieri is at the

top of his game.

He's got a successful real estate business, pulling in millions.

He's hobnobbing with world leaders.

So let's give Mr. Foglieri a big hand.

And he's found love with Hollywood A -lister Anne Hathaway.

He had this beautiful girlfriend, $100 million.

He had all the credibility in the world.

But this Italian is about to see his American dream fall apart when his fraud

exposed.

He wanted to live the lifestyle of the rich and famous, but he wanted to do it

with everybody else's money.

He would not stop at anything.

And that's what makes him very dangerous.

In 2007, Anne Hathaway is a household name.

The actress has starred in hits like The Princess Diary, Brokeback Mountain, and

The Devil Wears Prada.

She's a fixture on the red carpets, dressed in the latest designer styles

polished to perfection.

And never far from her side is her handsome boyfriend of three years,

businessman Raffaello Foglieri.

The two seem to have it all. They are young, they are in love, and they have

money to burn.

Ruffalo and Ann were definitely living it up at this time.

Together, they lead a first -class lifestyle.

Private jets, yachts, five -star hotels, fancy jewelry.

It appears to be a real -life fairy tale for the girl who once played a princess

on the big screen.

But looks can be deceiving.

Just one year later, this image will be shattered.

When Follieri is revealed as a con man and a multi -million dollar fraud is

exposed.

The story of Raffaella Follieri's rise and fall begins an ocean away in the

of Foggia in southern Italy.

Well, it's very provincial. Families are, you know, rooted there for

generations.

In 2003, Foliere is 25 years old and ready for more than what small town life

has to offer.

You know, Raphael is a gracious reader and from a very early age loved

the American dream.

He buys a one -way ticket to New York City, hoping to make a new life for

himself.

From his first arrival in New York.

Who's more this kind of classic, wide -eyed kid from the hinterland coming to

the big city hoping to conquer it?

New York City.

Nirvana. Clearly. You can make it in New York, you can make it anywhere.

The Italian doesn't speak much English.

With no money and no connections, Foglieri begins to use his considerable

to make a name for himself.

He's very attractive, charismatic, to a fault.

Very, very incredible X factor.

He had to sleep on people's sofas.

But even then, he had big ideas. He was going to create a company. He was going

to be an entrepreneur.

Bollieri begins talking up a company called Beauty Planet.

It will mass market hair and body products.

Beauty Planet was an all -natural product line.

You know, it was a very ultra -luxurious line.

Bollieri tells potential investors that he launched the same company in Italy

three years earlier.

He claims it was a raging success.

You would tell people it had been a great success, but it doesn't seem to

been because Italian legal documents show that he had bounced checks of $50

in total by the time it closed down.

Like the Italian version, this company is a flop.

Beauty Planet is underfunded and never gains any traction.

It really went nowhere, but he was able to convince a few people to invest some

money in it, and I think discovered how easy it was to get people to do that.

The young entrepreneur has momentum, but he needs a more sustainable plan.

He had a hot new idea, and it seems to have come from his father, Pasquale.

Polieri was raised in a staunchly Catholic family.

Father and son see an opportunity to parlay the family's modest Vatican

connections into a real estate business.

It's a timely strategy.

The Catholic Church is in the midst of a crisis over the priest sex abuse

scandal and needs cash fast to settle the claims.

The church will have to sell off thousands of properties to raise the

At a time when real estate was really hot, he wanted to get in and...

develop real estate and develop properties that had previously been

Catholic Church.

Foglieri says he has an inside man at the Vatican who could help him obtain

church properties at deeply discounted prices.

He said that he had certain connections with the Vatican that would allow him to

purchase properties at 20 to 25 percent below market value.

His friend, Andrea Sodano, is the nephew of Cardinal Angelo Sodano, the number

two man at the Vatican.

Now, Cardinal Sedano was actually the Secretary of State, if you will, at the

Vatican. He was sort of the right -hand guy to John Paul II.

So to have at least the ear, if not also the help, of Cardinal Sedano's

nephew, you know, it might make things happen.

The Vatican is one of the largest property holders in the world.

If the plan works, it could be a gold mine.

If Raffaello had tried to do this in Rome, he would have just been laughed

of the room. Obviously, the Vatican didn't need help in Italy to help sell

properties, and it probably didn't need any help in the U .S. But across the

ocean, 3 ,000, 5 ,000 miles away, it was a plausible story.

In 2003, Raffaello creates the Foglieri Group and appoints himself chairman and

CEO.

His plan is simple.

Follieri will buy up church properties on the cheap and redevelop them into

socially responsible businesses, such as schools, community centers, and low

-income housing, before flipping them for a profit.

It's a win -win situation for everyone.

Because he had these close ties to the Catholic Church, he would be able to

of get in, get these deals, turn them around, renovate them, sell them at a

price, and, you know, put his money for good uses.

But Foglieri is broke.

He needs investors who can provide the capital to get the business off the

ground.

It's a tough pitch for a foreigner with no real estate experience.

It wouldn't have done for Raffaello to present himself as sort of a middle

-class kid from southern Italy. Why would the Vatican want to deal with

like that?

So he had to puff up the family story.

Although he's a college dropout, Foglieri says he graduated from the

of Rome.

with degrees in law and economics.

And his failed company, Beauty Planet, Foglieri says he sold it in Italy for

million.

His family, he claims, are wealthy real estate developers in business for more

than three generations.

So there was this kind of image he was trying to create as this kind of Italian

print. And at the same time, he and his father said, oh, we have connections to

the Vatican.

While his life history is largely fabricated, His connections to the

although tenuous, are real.

Like all con men, or at least all good ones, there was an element of truth to

almost everything he said.

Follieri turns on the charm and wins over investors.

As soon as he got his first couple of hundred thousand dollars, his first

of investors, what did he spend it on? He spent it on himself.

Follieri believed that the richer he appears, the more people will want to

invest with him.

He moves off of his friend's couch and into an apartment at Trump Tower.

He begins wearing designer clothes and Chanel cologne.

He dines at New York's finest restaurants, like Cipriani and Nobu 57.

And he continues to network and schmooze his way into New York's upper crust.

He even got one of his investors to loan him the guy's white Mercedes and would

drive around in it, giving people the impression that it was his own. It was

the image. It was, you know, it was that phrase, fake it till you make it. And

the money starts to flow in.

When American Greed returns,

Follieri's star rises even higher when he lands Hollywood movie star Anne

Hathaway.

New York, New York.

It's the city that never sleeps.

A place where stars are born and fortunes are made.

In 2004, 26 -year -old Italian entrepreneur Raffaello Foglieri is

own dreams of wealth and fame.

His company, the Foglieri Group, plans to snap up distressed church property

flip it for a profit.

Puglieri says his family connection to the Vatican can get him below market

prices. He got a few people, pretty hard -boiled business people in New York, to

give him several hundred thousand dollars.

Puglieri is making a name for himself.

And soon he's caught the attention of an up -and -comer in Hollywood, actress

Anne Hathaway.

In 2004, the pair meets through a mutual friend.

Raffaella was set up with Anne Hathaway on a blind date when she was only about

21. She had, of course, made The Prince of Diaries as a teenager, and it was a

huge hit.

And she was obviously a rising star.

Anne's career is on the fast track.

She's just been cast in a promising new role.

I'm going to be doing Ang Lee's next movie called Brokeback Mountain.

Cool. Yeah, it's with Keith Ledger and Jake Gyllenhaal and Michelle Williams.

Not too shabby. That's great. I'm very, very excited.

They agreed to meet for lunch.

He was, unfortunately, about an hour late.

And I was told she was furious.

He was full of apologies when he finally arrived. He sent her flowers, and she

began to thaw.

He's got a great energy about him and a charisma and an elegance about him. He's

got that sort of very inviting Italian, suave, debonair personage, if you will.

As Anne would later tell reporters, it was love at first sight.

Raffaello appears to be a catch.

He's handsome, successful, and deeply religious.

Foglieri says his company is not always looking for the greatest profit.

Instead... He hopes to make a difference in the community.

His company will focus on philanthropy in line with the teachings of the

Catholic Church.

I think almost certainly Raffaello would have trotted out his Vatican real

estate project and his connections in the first 15 minutes of speaking to Anne

at lunch.

Anne and Raffaello very quickly become a couple.

Early on in the relationship, Poglieri takes Anne to Rome to meet the Pope.

Just like the other tourists, Foglieri buys a ticket to gain entry. But still,

the meeting makes an impression.

Was she impressed by that? I think as a 21 -year -old, she had to be.

They both seemed, at least at the first, equally intoxicated with each other.

It was a volatile relationship, by all accounts. You know, a lot of passion, a

lot of debate, a lot of breaking up and making up.

Outwardly, Follieri is the picture of success.

He has a famous girlfriend, a luxury apartment in Trump Tower, and a thriving

real estate business.

But his life is built on a series of lies.

And behind the scenes, his business is failing.

Follieri is burning through investor money, and so far has not snapped up a

single church property.

There was a point where he'd run through his first investor's money, several

hundred thousand dollars.

He wasn't finding any other investors.

He wasn't managing to sell or buy any of these church properties.

And he nearly ran out of money.

Polieri and Andrea Sodano, his inside man at the Vatican, have been

crisscrossing the country taking meetings with church leaders, always

highlight their ties to the Vatican.

They kind of shifted based on who he spoke to, but he made claims about how

was the CFO of the Vatican and would meet twice a week with the Pope when he

in Italy.

But so far, those connections are not working, and Foglieri is not landing any

deals. Did it actually close transactions?

Not necessarily, because he didn't close that many transactions, but it did get

him in through the front door.

In 2004, the Boston Archdiocese is at the heart of the sex abuse scandal.

It needs to sell more than $500 million in properties to pay legal claims.

Follieri makes an offer to buy 12 of the properties, but walks away with none.

And Mr. Follieri never was the high bidder on any property.

And Follieri's bids in Manhattan are also rejected.

He did bid on a couple of properties, but he was never the high bidder, and so

we simply did not make a deal with him.

And we're not about to cut him a break because he's a charismatic young man or

because some people think he might have Vatican connections or whatever it might

be.

It's the same story in city after city.

Follieri didn't have any inside track on the prize, and inevitably he was...

the guy giving the lowball offer.

With no new investors and his bank account down to almost nothing, Follieri

needs a break.

Raffaello is nearly out of money. He probably is having trouble paying his

at the Trump Tower apartment.

He's not got any other investors lined up. The jig's about up.

Follieri may be down for the count, but he's not out.

When American Greed returns...

Raffaello Fogliari makes friends in the highest places and scores $100 million.

As lavish a lifestyle as you can imagine is what he lived.

By April of 2005, Raffaello Foglieri's company, the Foglieri Group, is

floundering. The bank account is down to its last few dollars, and Foglieri has

not bought a single church property.

Progress was not being made in the company.

So, you know, that was a time when deals should have and could have been

happening, and they just were not happening.

His dreams of wealth and success are about to be shattered.

But ever the salesman, Foglieri continues to network.

and eke his way into elite circles of wealth and power.

Follieri was always looking for the next connection and what that connection

could do for him.

Follieri seeks out a meeting with Doug Band, former President Bill Clinton's

right -hand man.

He'd really sort of been a gatekeeper to Clinton.

Hoping to win favor with Band, Follieri begins tossing around the idea of making

a major donation to the Clinton Foundation.

Raffaello leaves him with the distinct impression that he is going to donate

about half a million dollars to the Clinton Foundation.

It's a bold move, since Foglieri is on the verge of bankruptcy.

But the ploy works.

He was very savvy about making the most of these contacts and leaving most

people with the impression that he had far more power than he did.

Band offers to meet Foglieri in person.

Also at the meeting, Bill Clinton's personal friend and business partner,

Burkle. Burkle is a billionaire.

He is widely considered one of the savviest investors in the country. His

Yucaipa fund has made a killing investing largely in supermarket and

chains over the past 19 years.

Raffaello, who has been on the verge of...

collapse with his project, who nearly had to go back to Foggia with his tail

between his legs, instead finds himself sitting at the Palace Hotel with Ron

Burkle. And in this meeting, Ron Burkle and Doug Band have the distinct

impression that they are wooing Raffaello into giving $500 ,000 to the

Foundation. And instead, at the end, they find that they have agreed to

give money to Follieri for his Vatican property project.

And, in fact, the consequence of that meeting was that Ron Burkle agreed to

commit up to $105 million to Raffaello Follieri.

Burkle agrees to a joint venture called Follieri -Ucaipa Investments.

Burkle wasn't that naive.

What he did was set up a sort of fund, which he, Burkle, controlled.

And he said to Fulieri, you bring us properties, Catholic Church properties

they want to sell. We'll look at the properties. If we like them, we'll buy

them. However, Burkle may have been somewhat snowed. He did give

Fulieri an operating budget.

And with that, Fulieri really went to town.

With the sudden cash infusion, Follieri is off and running.

He sets up offices on the 10th floor at 350 Park Avenue.

His staff quickly grows to more than 15 people, including Issa Bernacco,

Follieri's personal secretary, who, in an American Greed exclusive, is speaking

publicly for the first time.

We had times where we had very good relationships.

At the same time, we had times with strong confrontations.

From the outset, Follieri is a demanding boss with a sharp temper.

You could feel kind of mistreated in a way. He could scream,

he could yell.

A bit of a tyrant.

Very emotional, tended to fly off the handle.

But to outsiders, Follieri presents a different image, one of a devout and

humble Catholic.

He hires nuns to work the reception desk, and he has an altar built in the

office where he holds regular church services.

Almost everybody that worked there had some religious connection that brought

them in and made them willing to take a risk they probably would not otherwise

have taken.

Bollieri and Sedano spend months traveling around and bidding on church

properties. But as journalist Christine Haney discovers, Bollieri still has a

tough time closing the deals.

You would expect more to be occurring at that time because people were just so

thirsty to do real estate deals. You have to remember, this is 2006.

Everybody was buying real estate. You know, money was cheap. So he had been on

20 properties and only got three. That's not great odds at one of the easiest

times to buy real estate in U .S. financial history.

But with $100 million in the bank from Ron Burkle, Fulieri does close some

deals. He snaps up two churches in Philadelphia.

Transfiguration Church for $1 .1 million, and St.

Clement Church for $1 .8 million.

And later, he buys a 78 -acre parcel in the suburbs of Chicago.

He did win these deals, but these are kind of difficult things to develop.

It wasn't clear to me that they were profitable ventures.

He was looking at a property in Atlantic City. That property was off the

boardwalk. That property had been on the market for 25 years. If no one in 25

years had been able to make that property profitable, how was someone who

arrived from Italy going to make it work?

Bollieri has a lot of work to do.

But for now, he seems more consumed with his personal life.

Raffaello's relationship with girlfriend Anne Hathaway is really heating up.

The couple is inseparable.

And they've adopted a dog.

No, I just got a dog. You did? I did. What kind?

She's a chocolate lab.

What's her name?

Esmeralda.

And the couple enjoys the limelight.

He was out and about. He was everywhere in New York City.

They are often spotted on the red carpet together or sitting front row at the

fashion shows in Rome and Milan.

But you weren't hearing about him making money. You were hearing about him

spending money.

And with Foglieri holding the purse strings of the Yucaipa budget, he begins

spend wildly on himself.

He was able to spend on private jets. He was able to spend on Bermuda vacation

spots. He was able to spend on his beautiful suits. He was able to spend on

watches. He was able to spend on jewelry.

That money was coming from the operating budget that Ron Burkle had given him.

Foglieri built his own entourage, hiring a driver and a bodyguard.

Bob Donnelly, a retired criminal investigator, spends two years working

Follieri. It was an image that he wanted to portray, that he was important

enough that he needed a bodyguard for protection.

He wanted to live the lifestyle of the rich and famous, but he wanted to do it

with everybody else's money.

Follieri hands over his Trump Tower apartment to his parents and moves

into a $37 ,000 a month duplex.

overlooking St. Patrick's Cathedral.

His only neighbor was a Saudi Arabian prince who had his own pool in his

apartment. I mean, when you walked into his apartment, it was just, you know,

the Italian marble floors, and it was absolutely beautiful.

And first -class vacations for himself and Hathaway become routine, like a

cruise around the Mediterranean on the 113 -foot yacht, the Celine Ashley.

Here, John McCain is photographed climbing aboard in Montenegro.

And for New Year's, Foglieri charges a jet to the Dominican Republic to dine at

Oscar de la Renta's house along with Bill Clinton.

Rather than take, for example, a commercial flight, you know, that was

less beneath him.

He wanted the private jet. He stayed in the very best hotels, and then in the

best hotel, he had the best room.

Yucaipa execs are starting to get worried. They encourage Follieri to rein

his spending to no avail.

He spent as much of it as he could on himself and his girlfriends.

When American greed returns, Follieri's wild spending will finally catch up to

him. It was all smoke and mirrors.

He got away with it for quite a while until the world started caving in on

By the summer of 2006, Italian businessman Raffaello Fogliari has

name for himself.

He's got a multi -million dollar partnership with billionaire Ron Burkle

glamorous girlfriend by his side.

You have this beautiful girlfriend, $100 million, ties to Ron Burkle. He had all

the credibility in the world.

Anne Hathaway's latest hit, The Devil Wears Prada, is a box office sensation.

She lent a real credibility to him, and she did open doors because she was a

movie star. This is something that he benefited from.

Hoping to capitalize on Anne's star power, Foglieri invites her to sit on

board of directors of a new charity he creates called the Foglieri Foundation.

He talked about how it was really important to him to, you know, kind of

versus just kind of focus on the bottom line.

Foglieri pledges to use a portion of his proceeds to fund the new charity.

Its mission is to inoculate needy children in third world countries.

The foundation to him was really everything.

You know, his short -term successes were the fact that he could actually go and

impact the life of a child.

But so far, Follieri has not turned a profit, and he is blowing through the

operating budget.

There is also the issue that you kind of have to make money to spend money or

you need to make money to give money away. So that was interesting. How do

do this at the same time?

When he started the Foliere Foundation, he didn't actually have much money to

put into it. So he just started taking money from that operating budget without

telling Ron Burkle.

In July of 2006, Anne Hathaway and Raffaello Foliere traveled to Nicaragua

the foundation's first mission, inoculating 1 ,000 children.

Against hepatitis A.

If you vaccinate one child, you greatly heighten the chance that you're bringing

immunity into their family because, as we all know, diseases are spread very

easily amongst children.

And we're just so grateful to be given this opportunity.

Follieri relishes in the attention he receives for his philanthropic work.

All of this was brought to the attention of President, ex -President Clinton.

And then Follieri makes his boldest pledge.

$50 million to Bill Clinton's foundation.

I would like to ask now Raffaello Foglieri, the founder and president of

Foglieri Foundation, to come forward.

On September 21, 2006,

Bill Clinton hosts his annual global initiative gathering in New York City

honors Raffaello Foglieri for his humanitarian work.

This commitment is to vaccinate 10 ,000 children in Honduras.

That's a million -dollar commitment.

That is in addition to the foundation's previous $50 million commitment.

So they've done a great job.

So let's give Mr. Follieri a big hand.

Follieri declared that he was going to donate $50 million to the Clinton

Foundation. Well, this was terrific, but, of course, it never came to pass.

Bollieri seems to feel invincible.

And with that, he becomes emboldened. He systematically draws from the Yucaipa

operating budget as if it were his own piggy bank.

As lavish a lifestyle as you can imagine with the money he had is what he lived.

He racks up charges of more than $16 ,000 at the Excelsior Hotel in Rome and

,000 at the Hotel de Russie.

He charters a jet to Las Vegas and brings along designer Roberto Cavalli

slew of models for a weekend at the MGM Grand.

The credit card bills ramped way up as it got kind of worse and worse. And he,

think, tested the limit and found that for a while at least there were no

limits. But while Foglieri is spending wildly on himself, he's not meeting

payroll. And disgruntled employees are beginning to feel the pinch.

Mr. Foliere was able to bring a lot of people into the business who were devout

Roman Catholics who really wanted to help the church and who often worked for

literally nothing at times.

After burning through his operating funds, Foliere puts out urgent calls to

Yucaipa, saying he needs more money to cover the payroll.

But Yucaipa has had enough.

I don't think they ever thought he was simply stealing the money. I think

they...

He seemed to increasingly feel that he was irresponsible and wasn't respecting

them or their money and attempted to put tighter and tighter controls on his

finances over time.

Well, the fact is that all these expenses were coming out of that same

budget. So by late fall of 2006, even Ron Burkle was going,

wait a minute, this is really getting out of control, and it was.

Foglieri is starting to feel the heat.

Yocaipa is demanding to see documentation to substantiate many of

Foglieri was put in a position where he had to fabricate invoices and fabricate

work products.

Behind closed doors, Foglieri orders Issa to create the invoices.

He needs to make the invoices, and he tells me what to write for the invoices.

So I do it.

At one point, the witness did sit him down and literally say, we're doing

something illegal, we need to stop.

And he told her not to worry about it. He would not stop at anything, and

that's what makes him very dangerous.

But on April 23, 2007, Follieri's wild spending finally catches up to him.

After months of wrangling, Ron Burkle sues Foliere for misappropriating $1 .3

million of the operating budget.

The charges include $800 ,000 for nearly worthless engineering reports,

a six -figure loan to the foundation that has not been repaid, and countless

personal expenses on lavish hotels, meals, yachts, and private jets.

Foliere has charged $150 ,000 in medical expenses, including a $30 ,000 house

call. and even used Yocaipa money to pay for an elite dog -walking service for

Esmeralda, the couple's dog.

It seemed like Mr.

Foliere wanted everything good in life without working for it.

For Foliere, it looks like the gig is finally up.

When American Greed returns, things go from bad to worse when the feds come

calling.

In the spring of 2007, Raffaello Fogliari is under fire.

His business partner, Ron Burkle, has sued him for misappropriating $1 .3

million. And dozens of former investors and creditors are hounding him,

demanding their money back.

This was a very dramatic time for Raffaello because he'd at least for a

lost the love and money of Ron Burkle. So he desperately needed a new backer.

But Follieri is seemingly oblivious to the storm surrounding him. In September,

he takes his girlfriend, actress Anne Hathaway, on a seven -day cruise around

the Mediterranean aboard the 120 -foot luxury yacht, the Sun Grider.

With paparazzi circling, the pair frolic in the crystal blue waters, jet ski and

sunbathe.

But back in New York, Follieri's staff has still not been paid, and the strain

is beginning to take a toll.

And he called us.

From the yacht that he was on for the

vacation. And he told us that he didn't have any more money.

Issa Bernacco, Folieri's secretary, has not been paid in months.

She's struggling to make ends meet.

Every single penny that I had was to save my mortgage, save my home.

He had given me a check and the check bounced again.

And Bob Donnelly, Polieri's bodyguard, has been dealt a handful of worthless

checks and months of excuses.

I don't know how that could have happened. You know, there's plenty of

that account, you know. You really get angry. You get pissed off.

Because you see the way that he's throwing money away on himself, but yet

doesn't pay you what you're legitimately entitled to.

Polieri's employees are losing faith.

The Yucaipa suit has crippled business.

Employees were leaving him. He couldn't make payroll for any of his entities.

And he was starting to max out his credit cards.

Without Burkle footing the bill, Follieri is forced to move out of his

apartment and into a spare bedroom at his parents' place in Trump Tower.

Follieri was increasingly desperate at that time.

Follieri needs a cash infusion fast and incredibly...

He finds one in Plainfield Asset Management, a hedge fund based in

Connecticut.

Follieri came forward as the Vatican's guy in the States.

It had a certain power, and I think that plus his innate charm did the trick.

Plainfield Asset Management agreed to pay the 1 .3 to Burkle and to

pay a million or more in various...

outstanding expenses, credit card bills, stuff like that.

So once again, it seemed, Ruffalo was up and running.

By spring of 2008, the suit is behind him.

But with all the negative press, Fogliari is becoming a target, and other

creditors are descending fast.

On April 3rd, Fogliari is arrested and hauled into jail to face misdemeanor

charges for bouncing a check.

One of his earlier investors is still out $215 ,000.

And after months of haggling, Foglieri wrote him a check from an account that

held just $39.

Foglieri is released on bail, but his troubles are far from over.

This is dated in March of 2006, which is essentially in the middle of the

conspiracy. Behind the scenes, FBI Special Agent Ted Kachopi is covertly

building a criminal case.

It's a bit of a cliche, but at first you follow the money. You have to find

where the money came from and find where it went.

What he finds is a clear -cut case of fraud.

It appeared that he was essentially stealing investor money to live his

lifestyle. Have business cards of managers of all the expensive

then have the expenses we could trace back to investors reflect nightly meals

these restaurants.

If you tell an investor, I'm going to do X, Y, Z with your money and intake the

money and then don't do that and indeed spend the money on your dog walker and

your home, that's illegal.

Digging through Fogliari's bank records, Kachopi uncovers all the hallmarks of a

money laundering scheme.

I've worked complicated money laundering schemes, and Mr. Fogliari was not a

technically adept money launderer.

Fogliari had created shell companies with names like Keatsdale and Spiral

Associates. He set up bank accounts in Monaco, and over a period of two years,

he wired more than $2 million offshore.

He lived an extremely lavish lifestyle. Even while he was intaking millions of

dollars and stealing it, he was running up credit card bills even more than he

could pay off with what he was stealing.

And he wired more than $387 ,000 of Yucaipa's money to the Vatican, hoping

win favor.

Well, certainly, you know, Yucaipa is the largest victim in this case, but not

the only one.

Employees, creditors, and even members of the clergy were swindled by Foglieri.

A monsignor loaned him his credit card, and he took him for $30 ,000 at one

point. There were a lot of people who just were kind of burned financially,

people who were embarrassed. There was this kind of thread of embarrassment by

people who had been taken by this kind of Italian charmer.

But with the Fed circling, Fogliari's biggest concern appears to be planning

own 30th birthday party on the Isle of Capri.

So confident or deluded was he.

that the main thing he was worried about was planning his 30th birthday party,

which was going to be this great blowout at a restaurant on Capri.

Volieri and his friend and publicist, Melody Bonvicino, spend a weekend in

working out all the details.

Well, you know, certainly going back to Italy and celebrating in his homeland,

his fatherland, was very important to him, inviting his friends and his

and, you know, celebrating, even though it was a very difficult period for him.

The party is just two weeks away, but Follieri insists on going back to New

City. He's hoping to repair his relationship with Anne Hathaway.

With all the bad press, the couple is on shaky ground.

Well, how much Anne Hathaway is aware of is a fascinating question.

She had to be aware that the foundation was not doing what it said it should do

because she was on the board. And then here was this civil suit that Ron Burkle

had filed. And yet she seemed to have complete faith in him.

So was she snowed or did she just refuse to acknowledge those

suspicions?

Finally, after weeks of strain, Anne calls it quits.

It's a devastating loss for Foliere.

This is a woman he intended to spend the rest of his life with, clearly.

News of the breakup becomes a tabloid sensation, and fearing that Foliere may

a flight risk, Special Agent Ted Kachopi decides it's time to move.

I told my prosecutor the next day that we should go arrest this guy right away

because not only was the scam falling apart, but his girlfriend had also

left him.

On June 24, 2008, just after 6 a .m., Kachopi pounds on the door of Foglieri's

parents' apartment at Trump Tower.

Arrest warrant in hand.

He appeared shocked, but I've been arresting white -collar criminals

in New York for a number of years now, and they're always shocked. They never

see it coming.

Kachopi searches the apartment and finds a briefcase with $15 ,000 in cash.

and a plane ticket to Italy in Fogliari's name, scheduled for the very

And in a safe, a letter from Cardinal Angelo Sodano urging Fogliari to stop

claiming he has ties to the Vatican.

He did nothing but ramp up efforts to raise funds using the Vatican

pitch after receiving this letter.

The letter reads, I do not know how this distressing misunderstanding could have

occurred.

But it is necessary now to avoid such confusion in the future.

I do therefore appeal to your sensibility to be careful respecting

To me, that's the final nail in the coffin.

But then Kachopi finds evidence suggesting something even more ominous.

Mr. Polieri was attempting to replicate the fraud in other countries such as

Canada and Brazil and Great Britain.

Bollieri is cuffed and led downtown where he is charged with 12 counts of

fraud and money laundering.

His bail is set at $21 million.

Instead of celebrating on the island of Capri, Bollieri will spend his 30th

birthday behind bars.

So the fact that Anne Hathaway's boyfriend was arrested and taken in

and, you know, accused of being a conman, and that was big news.

Three months later, facing mounting evidence against him, Fogliari pleads

guilty. New York Times reporter Christine Haney is in the courtroom.

He was kind of bone thin, and for someone who was just kind of always

dressed, and his hair was always perfect and flawless, it was kind of messy and

overgrown, and he looked unshaven. And for someone who always smelled lovely,

had this smell that permeated the courtroom.

Fogliari is sentenced to four and a half years behind bars.

and ordered to forfeit $2 .4 million, including 13 designer watches and 11

pieces of jewelry he had given to Hathaway.

He had bought a lot of expensive jewelry for his girlfriend, and she didn't seem

to want to have anything to do with these things anyway, and did indeed turn

them over to the government.

It's a dramatic fall from grace for Foglieri. He went to hell in a handcart

hurry. It was to nobody else's fault but his own.

just really symbolizes this tremendous fall from this gilded age we had in, you

know, New York City at the time. He was at the heart of the real estate boom. He

was at the heart of the lending world. He had a beautiful girlfriend who was an

actress. He hung out with former presidents and duchesses, and here he is

prison scrubs, and he's skinny, and he's unshaven. It's very tragic.

Raffaella Foglieri is behind bars at a federal prison in Pennsylvania.

He is scheduled to be released in May of 2012.

He will be 33 years old.

He will come out of this bigger, better, brighter, stronger, and certainly he's

a resilient young man, clearly, very resilient.

In the end, some believe that Follieri's own ambition and greed were his

downfall, that the fame he so desperately sought made him a target.

If he hadn't been with Anne Hathaway, federal prosecutors would never have

bothered him.

Those prosecutors had to know that in busting Fulieri, it would be a big news

story, and that had to be part of the reason they went to such lengths to

someone who was ultimately a small potato.

I don't know if he's truly sorry for what he did. I'm sure he's sorry he got

caught. Mr. Fulieri wanted everything good in life without working for it. All

the evidence pointed to just pure greed.