1 00:00:01,960 --> 00:00:04,460 Live is a PNVP original. 2 00:00:11,200 --> 00:00:17,300 In this episode of American Greed, 29 -year -old Raffaello Foglieri is at the 3 00:00:17,300 --> 00:00:18,300 top of his game. 4 00:00:18,800 --> 00:00:22,200 He's got a successful real estate business, pulling in millions. 5 00:00:23,160 --> 00:00:25,020 He's hobnobbing with world leaders. 6 00:00:25,920 --> 00:00:28,020 So let's give Mr. Foglieri a big hand. 7 00:00:29,390 --> 00:00:33,270 And he's found love with Hollywood A -lister Anne Hathaway. 8 00:00:33,590 --> 00:00:35,890 He had this beautiful girlfriend, $100 million. 9 00:00:36,250 --> 00:00:38,370 He had all the credibility in the world. 10 00:00:38,730 --> 00:00:44,790 But this Italian is about to see his American dream fall apart when his fraud 11 00:00:44,790 --> 00:00:45,790 exposed. 12 00:00:45,990 --> 00:00:49,550 He wanted to live the lifestyle of the rich and famous, but he wanted to do it 13 00:00:49,550 --> 00:00:50,550 with everybody else's money. 14 00:00:51,030 --> 00:00:55,110 He would not stop at anything. 15 00:00:55,350 --> 00:00:58,150 And that's what makes him very dangerous. 16 00:01:15,850 --> 00:01:19,390 In 2007, Anne Hathaway is a household name. 17 00:01:19,730 --> 00:01:24,570 The actress has starred in hits like The Princess Diary, Brokeback Mountain, and 18 00:01:24,570 --> 00:01:25,710 The Devil Wears Prada. 19 00:01:27,070 --> 00:01:31,590 She's a fixture on the red carpets, dressed in the latest designer styles 20 00:01:31,590 --> 00:01:32,730 polished to perfection. 21 00:01:34,230 --> 00:01:38,630 And never far from her side is her handsome boyfriend of three years, 22 00:01:38,630 --> 00:01:40,930 businessman Raffaello Foglieri. 23 00:01:43,850 --> 00:01:47,630 The two seem to have it all. They are young, they are in love, and they have 24 00:01:47,630 --> 00:01:48,630 money to burn. 25 00:01:48,870 --> 00:01:52,030 Ruffalo and Ann were definitely living it up at this time. 26 00:01:53,290 --> 00:01:55,330 Together, they lead a first -class lifestyle. 27 00:01:55,930 --> 00:02:00,310 Private jets, yachts, five -star hotels, fancy jewelry. 28 00:02:00,610 --> 00:02:05,090 It appears to be a real -life fairy tale for the girl who once played a princess 29 00:02:05,090 --> 00:02:06,090 on the big screen. 30 00:02:06,890 --> 00:02:08,530 But looks can be deceiving. 31 00:02:09,050 --> 00:02:11,430 Just one year later, this image will be shattered. 32 00:02:11,910 --> 00:02:17,050 When Follieri is revealed as a con man and a multi -million dollar fraud is 33 00:02:17,050 --> 00:02:18,050 exposed. 34 00:02:21,690 --> 00:02:27,810 The story of Raffaella Follieri's rise and fall begins an ocean away in the 35 00:02:27,810 --> 00:02:29,590 of Foggia in southern Italy. 36 00:02:30,130 --> 00:02:34,590 Well, it's very provincial. Families are, you know, rooted there for 37 00:02:34,590 --> 00:02:35,590 generations. 38 00:02:36,270 --> 00:02:42,270 In 2003, Foliere is 25 years old and ready for more than what small town life 39 00:02:42,270 --> 00:02:43,270 has to offer. 40 00:02:43,410 --> 00:02:50,410 You know, Raphael is a gracious reader and from a very early age loved 41 00:02:50,410 --> 00:02:52,070 the American dream. 42 00:02:56,790 --> 00:03:01,290 He buys a one -way ticket to New York City, hoping to make a new life for 43 00:03:01,290 --> 00:03:02,289 himself. 44 00:03:02,290 --> 00:03:04,750 From his first arrival in New York. 45 00:03:05,160 --> 00:03:11,480 Who's more this kind of classic, wide -eyed kid from the hinterland coming to 46 00:03:11,480 --> 00:03:12,940 the big city hoping to conquer it? 47 00:03:13,660 --> 00:03:14,660 New York City. 48 00:03:14,900 --> 00:03:18,220 Nirvana. Clearly. You can make it in New York, you can make it anywhere. 49 00:03:19,240 --> 00:03:21,740 The Italian doesn't speak much English. 50 00:03:22,460 --> 00:03:27,400 With no money and no connections, Foglieri begins to use his considerable 51 00:03:27,400 --> 00:03:28,840 to make a name for himself. 52 00:03:29,420 --> 00:03:32,500 He's very attractive, charismatic, to a fault. 53 00:03:34,990 --> 00:03:37,150 Very, very incredible X factor. 54 00:03:37,750 --> 00:03:40,150 He had to sleep on people's sofas. 55 00:03:41,070 --> 00:03:45,350 But even then, he had big ideas. He was going to create a company. He was going 56 00:03:45,350 --> 00:03:46,350 to be an entrepreneur. 57 00:03:46,930 --> 00:03:50,550 Bollieri begins talking up a company called Beauty Planet. 58 00:03:51,070 --> 00:03:53,870 It will mass market hair and body products. 59 00:03:54,430 --> 00:03:56,770 Beauty Planet was an all -natural product line. 60 00:03:57,350 --> 00:04:00,710 You know, it was a very ultra -luxurious line. 61 00:04:01,520 --> 00:04:05,560 Bollieri tells potential investors that he launched the same company in Italy 62 00:04:05,560 --> 00:04:06,620 three years earlier. 63 00:04:06,900 --> 00:04:09,240 He claims it was a raging success. 64 00:04:09,780 --> 00:04:13,100 You would tell people it had been a great success, but it doesn't seem to 65 00:04:13,100 --> 00:04:19,240 been because Italian legal documents show that he had bounced checks of $50 66 00:04:19,240 --> 00:04:22,340 in total by the time it closed down. 67 00:04:22,720 --> 00:04:25,920 Like the Italian version, this company is a flop. 68 00:04:26,340 --> 00:04:30,040 Beauty Planet is underfunded and never gains any traction. 69 00:04:30,620 --> 00:04:35,020 It really went nowhere, but he was able to convince a few people to invest some 70 00:04:35,020 --> 00:04:41,300 money in it, and I think discovered how easy it was to get people to do that. 71 00:04:42,000 --> 00:04:46,800 The young entrepreneur has momentum, but he needs a more sustainable plan. 72 00:04:47,260 --> 00:04:52,120 He had a hot new idea, and it seems to have come from his father, Pasquale. 73 00:04:52,700 --> 00:04:55,820 Polieri was raised in a staunchly Catholic family. 74 00:04:56,480 --> 00:05:00,360 Father and son see an opportunity to parlay the family's modest Vatican 75 00:05:00,360 --> 00:05:02,820 connections into a real estate business. 76 00:05:03,420 --> 00:05:04,760 It's a timely strategy. 77 00:05:05,140 --> 00:05:09,000 The Catholic Church is in the midst of a crisis over the priest sex abuse 78 00:05:09,000 --> 00:05:12,580 scandal and needs cash fast to settle the claims. 79 00:05:13,420 --> 00:05:17,340 The church will have to sell off thousands of properties to raise the 80 00:05:18,080 --> 00:05:22,120 At a time when real estate was really hot, he wanted to get in and... 81 00:05:22,650 --> 00:05:27,030 develop real estate and develop properties that had previously been 82 00:05:27,030 --> 00:05:28,030 Catholic Church. 83 00:05:28,650 --> 00:05:32,850 Foglieri says he has an inside man at the Vatican who could help him obtain 84 00:05:32,850 --> 00:05:35,910 church properties at deeply discounted prices. 85 00:05:36,630 --> 00:05:40,610 He said that he had certain connections with the Vatican that would allow him to 86 00:05:40,610 --> 00:05:43,850 purchase properties at 20 to 25 percent below market value. 87 00:05:44,130 --> 00:05:50,290 His friend, Andrea Sodano, is the nephew of Cardinal Angelo Sodano, the number 88 00:05:50,290 --> 00:05:51,790 two man at the Vatican. 89 00:05:52,400 --> 00:05:56,960 Now, Cardinal Sedano was actually the Secretary of State, if you will, at the 90 00:05:56,960 --> 00:06:00,360 Vatican. He was sort of the right -hand guy to John Paul II. 91 00:06:00,620 --> 00:06:07,380 So to have at least the ear, if not also the help, of Cardinal Sedano's 92 00:06:07,380 --> 00:06:10,680 nephew, you know, it might make things happen. 93 00:06:11,140 --> 00:06:14,960 The Vatican is one of the largest property holders in the world. 94 00:06:15,400 --> 00:06:18,520 If the plan works, it could be a gold mine. 95 00:06:19,280 --> 00:06:22,980 If Raffaello had tried to do this in Rome, he would have just been laughed 96 00:06:22,980 --> 00:06:28,320 of the room. Obviously, the Vatican didn't need help in Italy to help sell 97 00:06:28,320 --> 00:06:31,920 properties, and it probably didn't need any help in the U .S. But across the 98 00:06:31,920 --> 00:06:36,380 ocean, 3 ,000, 5 ,000 miles away, it was a plausible story. 99 00:06:37,680 --> 00:06:43,700 In 2003, Raffaello creates the Foglieri Group and appoints himself chairman and 100 00:06:43,700 --> 00:06:44,700 CEO. 101 00:06:44,860 --> 00:06:46,140 His plan is simple. 102 00:06:46,700 --> 00:06:50,500 Follieri will buy up church properties on the cheap and redevelop them into 103 00:06:50,500 --> 00:06:55,440 socially responsible businesses, such as schools, community centers, and low 104 00:06:55,440 --> 00:06:58,540 -income housing, before flipping them for a profit. 105 00:06:59,180 --> 00:07:01,760 It's a win -win situation for everyone. 106 00:07:02,280 --> 00:07:06,940 Because he had these close ties to the Catholic Church, he would be able to 107 00:07:06,940 --> 00:07:11,320 of get in, get these deals, turn them around, renovate them, sell them at a 108 00:07:11,320 --> 00:07:14,120 price, and, you know, put his money for good uses. 109 00:07:14,920 --> 00:07:16,400 But Foglieri is broke. 110 00:07:16,680 --> 00:07:20,500 He needs investors who can provide the capital to get the business off the 111 00:07:20,500 --> 00:07:21,500 ground. 112 00:07:21,520 --> 00:07:24,960 It's a tough pitch for a foreigner with no real estate experience. 113 00:07:25,640 --> 00:07:29,940 It wouldn't have done for Raffaello to present himself as sort of a middle 114 00:07:29,940 --> 00:07:34,320 -class kid from southern Italy. Why would the Vatican want to deal with 115 00:07:34,320 --> 00:07:34,979 like that? 116 00:07:34,980 --> 00:07:37,300 So he had to puff up the family story. 117 00:07:37,920 --> 00:07:42,400 Although he's a college dropout, Foglieri says he graduated from the 118 00:07:42,400 --> 00:07:43,389 of Rome. 119 00:07:43,390 --> 00:07:45,210 with degrees in law and economics. 120 00:07:45,710 --> 00:07:51,130 And his failed company, Beauty Planet, Foglieri says he sold it in Italy for 121 00:07:51,130 --> 00:07:52,130 million. 122 00:07:53,290 --> 00:07:57,890 His family, he claims, are wealthy real estate developers in business for more 123 00:07:57,890 --> 00:07:58,910 than three generations. 124 00:07:59,790 --> 00:08:04,390 So there was this kind of image he was trying to create as this kind of Italian 125 00:08:04,390 --> 00:08:08,370 print. And at the same time, he and his father said, oh, we have connections to 126 00:08:08,370 --> 00:08:09,349 the Vatican. 127 00:08:09,350 --> 00:08:14,230 While his life history is largely fabricated, His connections to the 128 00:08:14,490 --> 00:08:16,150 although tenuous, are real. 129 00:08:16,530 --> 00:08:20,470 Like all con men, or at least all good ones, there was an element of truth to 130 00:08:20,470 --> 00:08:21,490 almost everything he said. 131 00:08:22,430 --> 00:08:25,610 Follieri turns on the charm and wins over investors. 132 00:08:26,350 --> 00:08:30,910 As soon as he got his first couple of hundred thousand dollars, his first 133 00:08:30,910 --> 00:08:34,230 of investors, what did he spend it on? He spent it on himself. 134 00:08:35,130 --> 00:08:38,970 Follieri believed that the richer he appears, the more people will want to 135 00:08:38,970 --> 00:08:39,970 invest with him. 136 00:08:40,830 --> 00:08:44,130 He moves off of his friend's couch and into an apartment at Trump Tower. 137 00:08:45,070 --> 00:08:48,330 He begins wearing designer clothes and Chanel cologne. 138 00:08:49,090 --> 00:08:53,890 He dines at New York's finest restaurants, like Cipriani and Nobu 57. 139 00:08:54,470 --> 00:08:59,310 And he continues to network and schmooze his way into New York's upper crust. 140 00:08:59,850 --> 00:09:06,050 He even got one of his investors to loan him the guy's white Mercedes and would 141 00:09:06,050 --> 00:09:10,030 drive around in it, giving people the impression that it was his own. It was 142 00:09:10,030 --> 00:09:15,010 the image. It was, you know, it was that phrase, fake it till you make it. And 143 00:09:15,010 --> 00:09:16,490 the money starts to flow in. 144 00:09:17,210 --> 00:09:18,710 When American Greed returns, 145 00:09:19,870 --> 00:09:24,890 Follieri's star rises even higher when he lands Hollywood movie star Anne 146 00:09:24,890 --> 00:09:25,890 Hathaway. 147 00:09:38,670 --> 00:09:40,010 New York, New York. 148 00:09:40,810 --> 00:09:42,670 It's the city that never sleeps. 149 00:09:43,590 --> 00:09:46,870 A place where stars are born and fortunes are made. 150 00:09:48,330 --> 00:09:54,970 In 2004, 26 -year -old Italian entrepreneur Raffaello Foglieri is 151 00:09:54,970 --> 00:09:56,710 own dreams of wealth and fame. 152 00:09:57,290 --> 00:10:02,870 His company, the Foglieri Group, plans to snap up distressed church property 153 00:10:02,870 --> 00:10:03,990 flip it for a profit. 154 00:10:04,730 --> 00:10:09,010 Puglieri says his family connection to the Vatican can get him below market 155 00:10:09,010 --> 00:10:14,990 prices. He got a few people, pretty hard -boiled business people in New York, to 156 00:10:14,990 --> 00:10:16,410 give him several hundred thousand dollars. 157 00:10:18,490 --> 00:10:20,490 Puglieri is making a name for himself. 158 00:10:21,070 --> 00:10:25,230 And soon he's caught the attention of an up -and -comer in Hollywood, actress 159 00:10:25,230 --> 00:10:26,370 Anne Hathaway. 160 00:10:27,190 --> 00:10:33,130 In 2004, the pair meets through a mutual friend. 161 00:10:34,280 --> 00:10:38,180 Raffaella was set up with Anne Hathaway on a blind date when she was only about 162 00:10:38,180 --> 00:10:44,300 21. She had, of course, made The Prince of Diaries as a teenager, and it was a 163 00:10:44,300 --> 00:10:45,300 huge hit. 164 00:10:45,580 --> 00:10:48,340 And she was obviously a rising star. 165 00:10:49,360 --> 00:10:51,500 Anne's career is on the fast track. 166 00:10:51,980 --> 00:10:54,560 She's just been cast in a promising new role. 167 00:10:55,020 --> 00:10:57,760 I'm going to be doing Ang Lee's next movie called Brokeback Mountain. 168 00:10:58,160 --> 00:11:01,380 Cool. Yeah, it's with Keith Ledger and Jake Gyllenhaal and Michelle Williams. 169 00:11:01,520 --> 00:11:03,840 Not too shabby. That's great. I'm very, very excited. 170 00:11:04,080 --> 00:11:05,300 They agreed to meet for lunch. 171 00:11:05,600 --> 00:11:07,580 He was, unfortunately, about an hour late. 172 00:11:08,340 --> 00:11:12,460 And I was told she was furious. 173 00:11:12,820 --> 00:11:19,640 He was full of apologies when he finally arrived. He sent her flowers, and she 174 00:11:19,640 --> 00:11:20,640 began to thaw. 175 00:11:21,740 --> 00:11:27,460 He's got a great energy about him and a charisma and an elegance about him. He's 176 00:11:27,460 --> 00:11:33,720 got that sort of very inviting Italian, suave, debonair personage, if you will. 177 00:11:33,920 --> 00:11:38,380 As Anne would later tell reporters, it was love at first sight. 178 00:11:39,260 --> 00:11:41,080 Raffaello appears to be a catch. 179 00:11:41,380 --> 00:11:44,540 He's handsome, successful, and deeply religious. 180 00:11:45,620 --> 00:11:49,180 Foglieri says his company is not always looking for the greatest profit. 181 00:11:49,540 --> 00:11:52,790 Instead... He hopes to make a difference in the community. 182 00:11:53,230 --> 00:11:57,650 His company will focus on philanthropy in line with the teachings of the 183 00:11:57,650 --> 00:11:58,650 Catholic Church. 184 00:11:59,950 --> 00:12:04,270 I think almost certainly Raffaello would have trotted out his Vatican real 185 00:12:04,270 --> 00:12:09,490 estate project and his connections in the first 15 minutes of speaking to Anne 186 00:12:09,490 --> 00:12:10,490 at lunch. 187 00:12:10,550 --> 00:12:13,370 Anne and Raffaello very quickly become a couple. 188 00:12:13,950 --> 00:12:19,070 Early on in the relationship, Poglieri takes Anne to Rome to meet the Pope. 189 00:12:19,880 --> 00:12:25,580 Just like the other tourists, Foglieri buys a ticket to gain entry. But still, 190 00:12:25,780 --> 00:12:27,340 the meeting makes an impression. 191 00:12:27,740 --> 00:12:32,260 Was she impressed by that? I think as a 21 -year -old, she had to be. 192 00:12:32,740 --> 00:12:37,760 They both seemed, at least at the first, equally intoxicated with each other. 193 00:12:38,540 --> 00:12:42,680 It was a volatile relationship, by all accounts. You know, a lot of passion, a 194 00:12:42,680 --> 00:12:46,800 lot of debate, a lot of breaking up and making up. 195 00:12:48,230 --> 00:12:50,610 Outwardly, Follieri is the picture of success. 196 00:12:50,970 --> 00:12:56,230 He has a famous girlfriend, a luxury apartment in Trump Tower, and a thriving 197 00:12:56,230 --> 00:12:57,230 real estate business. 198 00:12:57,610 --> 00:13:00,630 But his life is built on a series of lies. 199 00:13:01,370 --> 00:13:04,310 And behind the scenes, his business is failing. 200 00:13:05,630 --> 00:13:10,710 Follieri is burning through investor money, and so far has not snapped up a 201 00:13:10,710 --> 00:13:12,010 single church property. 202 00:13:12,590 --> 00:13:17,710 There was a point where he'd run through his first investor's money, several 203 00:13:17,710 --> 00:13:18,709 hundred thousand dollars. 204 00:13:18,710 --> 00:13:20,850 He wasn't finding any other investors. 205 00:13:21,110 --> 00:13:25,390 He wasn't managing to sell or buy any of these church properties. 206 00:13:25,690 --> 00:13:27,450 And he nearly ran out of money. 207 00:13:28,110 --> 00:13:32,630 Polieri and Andrea Sodano, his inside man at the Vatican, have been 208 00:13:32,630 --> 00:13:37,070 crisscrossing the country taking meetings with church leaders, always 209 00:13:37,070 --> 00:13:38,950 highlight their ties to the Vatican. 210 00:13:39,390 --> 00:13:44,590 They kind of shifted based on who he spoke to, but he made claims about how 211 00:13:44,590 --> 00:13:48,950 was the CFO of the Vatican and would meet twice a week with the Pope when he 212 00:13:48,950 --> 00:13:49,950 in Italy. 213 00:13:50,010 --> 00:13:55,690 But so far, those connections are not working, and Foglieri is not landing any 214 00:13:55,690 --> 00:13:58,630 deals. Did it actually close transactions? 215 00:13:59,410 --> 00:14:03,730 Not necessarily, because he didn't close that many transactions, but it did get 216 00:14:03,730 --> 00:14:04,750 him in through the front door. 217 00:14:07,210 --> 00:14:12,370 In 2004, the Boston Archdiocese is at the heart of the sex abuse scandal. 218 00:14:12,750 --> 00:14:17,830 It needs to sell more than $500 million in properties to pay legal claims. 219 00:14:18,730 --> 00:14:23,590 Follieri makes an offer to buy 12 of the properties, but walks away with none. 220 00:14:23,930 --> 00:14:29,010 And Mr. Follieri never was the high bidder on any property. 221 00:14:29,370 --> 00:14:32,430 And Follieri's bids in Manhattan are also rejected. 222 00:14:33,080 --> 00:14:37,460 He did bid on a couple of properties, but he was never the high bidder, and so 223 00:14:37,460 --> 00:14:40,180 we simply did not make a deal with him. 224 00:14:40,380 --> 00:14:45,960 And we're not about to cut him a break because he's a charismatic young man or 225 00:14:45,960 --> 00:14:50,620 because some people think he might have Vatican connections or whatever it might 226 00:14:50,620 --> 00:14:51,620 be. 227 00:14:52,020 --> 00:14:55,220 It's the same story in city after city. 228 00:14:55,960 --> 00:15:01,680 Follieri didn't have any inside track on the prize, and inevitably he was... 229 00:15:01,950 --> 00:15:03,330 the guy giving the lowball offer. 230 00:15:04,470 --> 00:15:09,830 With no new investors and his bank account down to almost nothing, Follieri 231 00:15:09,830 --> 00:15:10,830 needs a break. 232 00:15:11,330 --> 00:15:16,270 Raffaello is nearly out of money. He probably is having trouble paying his 233 00:15:16,270 --> 00:15:17,590 at the Trump Tower apartment. 234 00:15:18,730 --> 00:15:22,570 He's not got any other investors lined up. The jig's about up. 235 00:15:23,130 --> 00:15:26,830 Follieri may be down for the count, but he's not out. 236 00:15:27,730 --> 00:15:29,810 When American Greed returns... 237 00:15:30,510 --> 00:15:37,330 Raffaello Fogliari makes friends in the highest places and scores $100 million. 238 00:15:37,950 --> 00:15:41,270 As lavish a lifestyle as you can imagine is what he lived. 239 00:15:55,180 --> 00:16:00,180 By April of 2005, Raffaello Foglieri's company, the Foglieri Group, is 240 00:16:00,180 --> 00:16:05,560 floundering. The bank account is down to its last few dollars, and Foglieri has 241 00:16:05,560 --> 00:16:07,420 not bought a single church property. 242 00:16:07,900 --> 00:16:10,100 Progress was not being made in the company. 243 00:16:10,340 --> 00:16:14,340 So, you know, that was a time when deals should have and could have been 244 00:16:14,340 --> 00:16:16,100 happening, and they just were not happening. 245 00:16:16,940 --> 00:16:20,140 His dreams of wealth and success are about to be shattered. 246 00:16:20,420 --> 00:16:23,320 But ever the salesman, Foglieri continues to network. 247 00:16:23,740 --> 00:16:27,040 and eke his way into elite circles of wealth and power. 248 00:16:27,500 --> 00:16:31,220 Follieri was always looking for the next connection and what that connection 249 00:16:31,220 --> 00:16:32,220 could do for him. 250 00:16:34,000 --> 00:16:38,480 Follieri seeks out a meeting with Doug Band, former President Bill Clinton's 251 00:16:38,480 --> 00:16:39,480 right -hand man. 252 00:16:39,600 --> 00:16:42,560 He'd really sort of been a gatekeeper to Clinton. 253 00:16:43,240 --> 00:16:47,960 Hoping to win favor with Band, Follieri begins tossing around the idea of making 254 00:16:47,960 --> 00:16:50,160 a major donation to the Clinton Foundation. 255 00:16:50,920 --> 00:16:54,800 Raffaello leaves him with the distinct impression that he is going to donate 256 00:16:54,800 --> 00:16:57,400 about half a million dollars to the Clinton Foundation. 257 00:16:57,740 --> 00:17:01,320 It's a bold move, since Foglieri is on the verge of bankruptcy. 258 00:17:01,820 --> 00:17:03,180 But the ploy works. 259 00:17:03,660 --> 00:17:10,200 He was very savvy about making the most of these contacts and leaving most 260 00:17:10,200 --> 00:17:14,920 people with the impression that he had far more power than he did. 261 00:17:15,760 --> 00:17:18,119 Band offers to meet Foglieri in person. 262 00:17:18,720 --> 00:17:22,440 Also at the meeting, Bill Clinton's personal friend and business partner, 263 00:17:22,440 --> 00:17:24,619 Burkle. Burkle is a billionaire. 264 00:17:25,020 --> 00:17:29,140 He is widely considered one of the savviest investors in the country. His 265 00:17:29,140 --> 00:17:33,380 Yucaipa fund has made a killing investing largely in supermarket and 266 00:17:33,380 --> 00:17:36,020 chains over the past 19 years. 267 00:17:36,700 --> 00:17:39,220 Raffaello, who has been on the verge of... 268 00:17:41,000 --> 00:17:45,100 collapse with his project, who nearly had to go back to Foggia with his tail 269 00:17:45,100 --> 00:17:50,380 between his legs, instead finds himself sitting at the Palace Hotel with Ron 270 00:17:50,380 --> 00:17:56,900 Burkle. And in this meeting, Ron Burkle and Doug Band have the distinct 271 00:17:56,900 --> 00:18:02,220 impression that they are wooing Raffaello into giving $500 ,000 to the 272 00:18:02,220 --> 00:18:08,480 Foundation. And instead, at the end, they find that they have agreed to 273 00:18:08,480 --> 00:18:13,040 give money to Follieri for his Vatican property project. 274 00:18:13,240 --> 00:18:17,960 And, in fact, the consequence of that meeting was that Ron Burkle agreed to 275 00:18:17,960 --> 00:18:21,960 commit up to $105 million to Raffaello Follieri. 276 00:18:22,820 --> 00:18:28,160 Burkle agrees to a joint venture called Follieri -Ucaipa Investments. 277 00:18:28,620 --> 00:18:29,780 Burkle wasn't that naive. 278 00:18:30,100 --> 00:18:34,700 What he did was set up a sort of fund, which he, Burkle, controlled. 279 00:18:35,140 --> 00:18:40,580 And he said to Fulieri, you bring us properties, Catholic Church properties 280 00:18:40,580 --> 00:18:44,640 they want to sell. We'll look at the properties. If we like them, we'll buy 281 00:18:44,640 --> 00:18:50,660 them. However, Burkle may have been somewhat snowed. He did give 282 00:18:50,660 --> 00:18:53,060 Fulieri an operating budget. 283 00:18:53,500 --> 00:18:56,440 And with that, Fulieri really went to town. 284 00:18:57,320 --> 00:19:01,340 With the sudden cash infusion, Follieri is off and running. 285 00:19:01,600 --> 00:19:05,280 He sets up offices on the 10th floor at 350 Park Avenue. 286 00:19:05,660 --> 00:19:10,700 His staff quickly grows to more than 15 people, including Issa Bernacco, 287 00:19:10,940 --> 00:19:16,320 Follieri's personal secretary, who, in an American Greed exclusive, is speaking 288 00:19:16,320 --> 00:19:18,060 publicly for the first time. 289 00:19:18,360 --> 00:19:21,960 We had times where we had very good relationships. 290 00:19:22,360 --> 00:19:26,780 At the same time, we had times with strong confrontations. 291 00:19:27,360 --> 00:19:32,020 From the outset, Follieri is a demanding boss with a sharp temper. 292 00:19:32,340 --> 00:19:39,040 You could feel kind of mistreated in a way. He could scream, 293 00:19:39,360 --> 00:19:40,360 he could yell. 294 00:19:40,620 --> 00:19:41,780 A bit of a tyrant. 295 00:19:43,300 --> 00:19:45,660 Very emotional, tended to fly off the handle. 296 00:19:46,350 --> 00:19:51,510 But to outsiders, Follieri presents a different image, one of a devout and 297 00:19:51,510 --> 00:19:52,510 humble Catholic. 298 00:19:52,850 --> 00:19:57,770 He hires nuns to work the reception desk, and he has an altar built in the 299 00:19:57,770 --> 00:20:00,750 office where he holds regular church services. 300 00:20:01,550 --> 00:20:05,930 Almost everybody that worked there had some religious connection that brought 301 00:20:05,930 --> 00:20:10,210 them in and made them willing to take a risk they probably would not otherwise 302 00:20:10,210 --> 00:20:11,210 have taken. 303 00:20:12,200 --> 00:20:16,500 Bollieri and Sedano spend months traveling around and bidding on church 304 00:20:16,500 --> 00:20:21,980 properties. But as journalist Christine Haney discovers, Bollieri still has a 305 00:20:21,980 --> 00:20:23,760 tough time closing the deals. 306 00:20:24,320 --> 00:20:28,200 You would expect more to be occurring at that time because people were just so 307 00:20:28,200 --> 00:20:31,540 thirsty to do real estate deals. You have to remember, this is 2006. 308 00:20:31,780 --> 00:20:35,460 Everybody was buying real estate. You know, money was cheap. So he had been on 309 00:20:35,460 --> 00:20:40,000 20 properties and only got three. That's not great odds at one of the easiest 310 00:20:40,000 --> 00:20:42,460 times to buy real estate in U .S. financial history. 311 00:20:43,000 --> 00:20:48,540 But with $100 million in the bank from Ron Burkle, Fulieri does close some 312 00:20:48,540 --> 00:20:51,600 deals. He snaps up two churches in Philadelphia. 313 00:20:52,860 --> 00:20:56,600 Transfiguration Church for $1 .1 million, and St. 314 00:20:56,800 --> 00:20:58,880 Clement Church for $1 .8 million. 315 00:20:59,280 --> 00:21:03,620 And later, he buys a 78 -acre parcel in the suburbs of Chicago. 316 00:21:04,180 --> 00:21:07,840 He did win these deals, but these are kind of difficult things to develop. 317 00:21:08,100 --> 00:21:10,520 It wasn't clear to me that they were profitable ventures. 318 00:21:11,050 --> 00:21:14,110 He was looking at a property in Atlantic City. That property was off the 319 00:21:14,110 --> 00:21:18,270 boardwalk. That property had been on the market for 25 years. If no one in 25 320 00:21:18,270 --> 00:21:22,450 years had been able to make that property profitable, how was someone who 321 00:21:22,450 --> 00:21:24,530 arrived from Italy going to make it work? 322 00:21:25,750 --> 00:21:27,650 Bollieri has a lot of work to do. 323 00:21:28,090 --> 00:21:31,390 But for now, he seems more consumed with his personal life. 324 00:21:32,530 --> 00:21:36,310 Raffaello's relationship with girlfriend Anne Hathaway is really heating up. 325 00:21:36,530 --> 00:21:38,290 The couple is inseparable. 326 00:21:38,790 --> 00:21:40,330 And they've adopted a dog. 327 00:21:41,350 --> 00:21:44,190 No, I just got a dog. You did? I did. What kind? 328 00:21:44,530 --> 00:21:45,550 She's a chocolate lab. 329 00:21:45,750 --> 00:21:46,729 What's her name? 330 00:21:46,730 --> 00:21:47,730 Esmeralda. 331 00:21:50,450 --> 00:21:52,870 And the couple enjoys the limelight. 332 00:21:53,070 --> 00:21:55,710 He was out and about. He was everywhere in New York City. 333 00:21:56,150 --> 00:22:00,970 They are often spotted on the red carpet together or sitting front row at the 334 00:22:00,970 --> 00:22:03,230 fashion shows in Rome and Milan. 335 00:22:03,670 --> 00:22:06,790 But you weren't hearing about him making money. You were hearing about him 336 00:22:06,790 --> 00:22:07,790 spending money. 337 00:22:07,930 --> 00:22:12,130 And with Foglieri holding the purse strings of the Yucaipa budget, he begins 338 00:22:12,130 --> 00:22:13,770 spend wildly on himself. 339 00:22:14,190 --> 00:22:18,270 He was able to spend on private jets. He was able to spend on Bermuda vacation 340 00:22:18,270 --> 00:22:22,330 spots. He was able to spend on his beautiful suits. He was able to spend on 341 00:22:22,330 --> 00:22:24,070 watches. He was able to spend on jewelry. 342 00:22:24,630 --> 00:22:29,690 That money was coming from the operating budget that Ron Burkle had given him. 343 00:22:30,790 --> 00:22:34,970 Foglieri built his own entourage, hiring a driver and a bodyguard. 344 00:22:36,190 --> 00:22:41,170 Bob Donnelly, a retired criminal investigator, spends two years working 345 00:22:41,170 --> 00:22:44,790 Follieri. It was an image that he wanted to portray, that he was important 346 00:22:44,790 --> 00:22:49,290 enough that he needed a bodyguard for protection. 347 00:22:49,670 --> 00:22:53,690 He wanted to live the lifestyle of the rich and famous, but he wanted to do it 348 00:22:53,690 --> 00:22:54,690 with everybody else's money. 349 00:22:55,770 --> 00:23:00,670 Follieri hands over his Trump Tower apartment to his parents and moves 350 00:23:00,670 --> 00:23:03,330 into a $37 ,000 a month duplex. 351 00:23:03,900 --> 00:23:05,860 overlooking St. Patrick's Cathedral. 352 00:23:06,240 --> 00:23:11,960 His only neighbor was a Saudi Arabian prince who had his own pool in his 353 00:23:11,960 --> 00:23:15,840 apartment. I mean, when you walked into his apartment, it was just, you know, 354 00:23:15,860 --> 00:23:20,480 the Italian marble floors, and it was absolutely beautiful. 355 00:23:21,340 --> 00:23:26,300 And first -class vacations for himself and Hathaway become routine, like a 356 00:23:26,300 --> 00:23:31,600 cruise around the Mediterranean on the 113 -foot yacht, the Celine Ashley. 357 00:23:32,330 --> 00:23:35,810 Here, John McCain is photographed climbing aboard in Montenegro. 358 00:23:37,030 --> 00:23:42,330 And for New Year's, Foglieri charges a jet to the Dominican Republic to dine at 359 00:23:42,330 --> 00:23:45,310 Oscar de la Renta's house along with Bill Clinton. 360 00:23:46,450 --> 00:23:50,230 Rather than take, for example, a commercial flight, you know, that was 361 00:23:50,230 --> 00:23:51,230 less beneath him. 362 00:23:51,330 --> 00:23:57,930 He wanted the private jet. He stayed in the very best hotels, and then in the 363 00:23:57,930 --> 00:23:59,670 best hotel, he had the best room. 364 00:24:00,810 --> 00:24:05,190 Yucaipa execs are starting to get worried. They encourage Follieri to rein 365 00:24:05,190 --> 00:24:06,630 his spending to no avail. 366 00:24:07,050 --> 00:24:10,550 He spent as much of it as he could on himself and his girlfriends. 367 00:24:11,370 --> 00:24:16,890 When American greed returns, Follieri's wild spending will finally catch up to 368 00:24:16,890 --> 00:24:18,450 him. It was all smoke and mirrors. 369 00:24:18,670 --> 00:24:23,010 He got away with it for quite a while until the world started caving in on 370 00:24:34,090 --> 00:24:39,530 By the summer of 2006, Italian businessman Raffaello Fogliari has 371 00:24:39,530 --> 00:24:40,530 name for himself. 372 00:24:40,570 --> 00:24:45,130 He's got a multi -million dollar partnership with billionaire Ron Burkle 373 00:24:45,130 --> 00:24:47,010 glamorous girlfriend by his side. 374 00:24:47,270 --> 00:24:52,110 You have this beautiful girlfriend, $100 million, ties to Ron Burkle. He had all 375 00:24:52,110 --> 00:24:53,210 the credibility in the world. 376 00:24:53,850 --> 00:24:58,450 Anne Hathaway's latest hit, The Devil Wears Prada, is a box office sensation. 377 00:24:59,130 --> 00:25:03,090 She lent a real credibility to him, and she did open doors because she was a 378 00:25:03,090 --> 00:25:05,310 movie star. This is something that he benefited from. 379 00:25:06,090 --> 00:25:10,630 Hoping to capitalize on Anne's star power, Foglieri invites her to sit on 380 00:25:10,630 --> 00:25:15,250 board of directors of a new charity he creates called the Foglieri Foundation. 381 00:25:15,870 --> 00:25:19,550 He talked about how it was really important to him to, you know, kind of 382 00:25:19,550 --> 00:25:22,770 versus just kind of focus on the bottom line. 383 00:25:23,190 --> 00:25:26,930 Foglieri pledges to use a portion of his proceeds to fund the new charity. 384 00:25:27,610 --> 00:25:31,510 Its mission is to inoculate needy children in third world countries. 385 00:25:31,910 --> 00:25:34,390 The foundation to him was really everything. 386 00:25:35,250 --> 00:25:41,130 You know, his short -term successes were the fact that he could actually go and 387 00:25:41,130 --> 00:25:42,430 impact the life of a child. 388 00:25:43,530 --> 00:25:48,150 But so far, Follieri has not turned a profit, and he is blowing through the 389 00:25:48,150 --> 00:25:49,150 operating budget. 390 00:25:49,870 --> 00:25:53,210 There is also the issue that you kind of have to make money to spend money or 391 00:25:53,210 --> 00:25:56,270 you need to make money to give money away. So that was interesting. How do 392 00:25:56,270 --> 00:25:57,270 do this at the same time? 393 00:25:57,790 --> 00:26:02,410 When he started the Foliere Foundation, he didn't actually have much money to 394 00:26:02,410 --> 00:26:06,350 put into it. So he just started taking money from that operating budget without 395 00:26:06,350 --> 00:26:07,930 telling Ron Burkle. 396 00:26:08,310 --> 00:26:14,430 In July of 2006, Anne Hathaway and Raffaello Foliere traveled to Nicaragua 397 00:26:14,430 --> 00:26:18,330 the foundation's first mission, inoculating 1 ,000 children. 398 00:26:18,910 --> 00:26:20,170 Against hepatitis A. 399 00:26:20,430 --> 00:26:25,070 If you vaccinate one child, you greatly heighten the chance that you're bringing 400 00:26:25,070 --> 00:26:29,150 immunity into their family because, as we all know, diseases are spread very 401 00:26:29,150 --> 00:26:30,150 easily amongst children. 402 00:26:30,390 --> 00:26:33,110 And we're just so grateful to be given this opportunity. 403 00:26:33,750 --> 00:26:37,830 Follieri relishes in the attention he receives for his philanthropic work. 404 00:26:38,150 --> 00:26:42,310 All of this was brought to the attention of President, ex -President Clinton. 405 00:26:42,770 --> 00:26:45,450 And then Follieri makes his boldest pledge. 406 00:26:46,170 --> 00:26:48,870 $50 million to Bill Clinton's foundation. 407 00:26:49,470 --> 00:26:54,530 I would like to ask now Raffaello Foglieri, the founder and president of 408 00:26:54,530 --> 00:26:56,250 Foglieri Foundation, to come forward. 409 00:26:56,470 --> 00:26:58,570 On September 21, 2006, 410 00:26:59,270 --> 00:27:04,210 Bill Clinton hosts his annual global initiative gathering in New York City 411 00:27:04,210 --> 00:27:07,890 honors Raffaello Foglieri for his humanitarian work. 412 00:27:08,460 --> 00:27:13,480 This commitment is to vaccinate 10 ,000 children in Honduras. 413 00:27:13,740 --> 00:27:15,340 That's a million -dollar commitment. 414 00:27:16,400 --> 00:27:20,460 That is in addition to the foundation's previous $50 million commitment. 415 00:27:21,040 --> 00:27:22,440 So they've done a great job. 416 00:27:22,680 --> 00:27:24,760 So let's give Mr. Follieri a big hand. 417 00:27:26,760 --> 00:27:31,080 Follieri declared that he was going to donate $50 million to the Clinton 418 00:27:31,080 --> 00:27:35,700 Foundation. Well, this was terrific, but, of course, it never came to pass. 419 00:27:36,639 --> 00:27:38,800 Bollieri seems to feel invincible. 420 00:27:39,180 --> 00:27:44,500 And with that, he becomes emboldened. He systematically draws from the Yucaipa 421 00:27:44,500 --> 00:27:47,040 operating budget as if it were his own piggy bank. 422 00:27:47,420 --> 00:27:52,100 As lavish a lifestyle as you can imagine with the money he had is what he lived. 423 00:27:52,420 --> 00:27:59,000 He racks up charges of more than $16 ,000 at the Excelsior Hotel in Rome and 424 00:27:59,000 --> 00:28:00,640 ,000 at the Hotel de Russie. 425 00:28:01,960 --> 00:28:06,600 He charters a jet to Las Vegas and brings along designer Roberto Cavalli 426 00:28:06,600 --> 00:28:09,640 slew of models for a weekend at the MGM Grand. 427 00:28:10,100 --> 00:28:15,700 The credit card bills ramped way up as it got kind of worse and worse. And he, 428 00:28:15,700 --> 00:28:20,520 think, tested the limit and found that for a while at least there were no 429 00:28:20,520 --> 00:28:25,120 limits. But while Foglieri is spending wildly on himself, he's not meeting 430 00:28:25,120 --> 00:28:29,080 payroll. And disgruntled employees are beginning to feel the pinch. 431 00:28:29,600 --> 00:28:34,200 Mr. Foliere was able to bring a lot of people into the business who were devout 432 00:28:34,200 --> 00:28:38,740 Roman Catholics who really wanted to help the church and who often worked for 433 00:28:38,740 --> 00:28:40,160 literally nothing at times. 434 00:28:40,800 --> 00:28:45,080 After burning through his operating funds, Foliere puts out urgent calls to 435 00:28:45,080 --> 00:28:48,200 Yucaipa, saying he needs more money to cover the payroll. 436 00:28:48,480 --> 00:28:50,380 But Yucaipa has had enough. 437 00:28:50,660 --> 00:28:54,320 I don't think they ever thought he was simply stealing the money. I think 438 00:28:54,320 --> 00:28:55,320 they... 439 00:28:55,550 --> 00:29:00,930 He seemed to increasingly feel that he was irresponsible and wasn't respecting 440 00:29:00,930 --> 00:29:05,710 them or their money and attempted to put tighter and tighter controls on his 441 00:29:05,710 --> 00:29:06,790 finances over time. 442 00:29:07,410 --> 00:29:12,050 Well, the fact is that all these expenses were coming out of that same 443 00:29:12,050 --> 00:29:19,050 budget. So by late fall of 2006, even Ron Burkle was going, 444 00:29:19,130 --> 00:29:22,570 wait a minute, this is really getting out of control, and it was. 445 00:29:23,390 --> 00:29:25,610 Foglieri is starting to feel the heat. 446 00:29:26,930 --> 00:29:31,670 Yocaipa is demanding to see documentation to substantiate many of 447 00:29:32,410 --> 00:29:36,750 Foglieri was put in a position where he had to fabricate invoices and fabricate 448 00:29:36,750 --> 00:29:37,750 work products. 449 00:29:37,990 --> 00:29:42,470 Behind closed doors, Foglieri orders Issa to create the invoices. 450 00:29:42,990 --> 00:29:48,170 He needs to make the invoices, and he tells me what to write for the invoices. 451 00:29:48,930 --> 00:29:49,950 So I do it. 452 00:29:50,330 --> 00:29:54,110 At one point, the witness did sit him down and literally say, we're doing 453 00:29:54,110 --> 00:29:55,530 something illegal, we need to stop. 454 00:29:56,550 --> 00:30:03,530 And he told her not to worry about it. He would not stop at anything, and 455 00:30:03,530 --> 00:30:05,890 that's what makes him very dangerous. 456 00:30:06,610 --> 00:30:12,030 But on April 23, 2007, Follieri's wild spending finally catches up to him. 457 00:30:12,370 --> 00:30:18,260 After months of wrangling, Ron Burkle sues Foliere for misappropriating $1 .3 458 00:30:18,260 --> 00:30:20,080 million of the operating budget. 459 00:30:20,500 --> 00:30:24,520 The charges include $800 ,000 for nearly worthless engineering reports, 460 00:30:25,360 --> 00:30:29,600 a six -figure loan to the foundation that has not been repaid, and countless 461 00:30:29,600 --> 00:30:34,100 personal expenses on lavish hotels, meals, yachts, and private jets. 462 00:30:34,820 --> 00:30:40,820 Foliere has charged $150 ,000 in medical expenses, including a $30 ,000 house 463 00:30:40,820 --> 00:30:45,490 call. and even used Yocaipa money to pay for an elite dog -walking service for 464 00:30:45,490 --> 00:30:47,390 Esmeralda, the couple's dog. 465 00:30:47,790 --> 00:30:48,870 It seemed like Mr. 466 00:30:49,310 --> 00:30:52,830 Foliere wanted everything good in life without working for it. 467 00:30:53,110 --> 00:30:56,510 For Foliere, it looks like the gig is finally up. 468 00:30:57,950 --> 00:31:03,130 When American Greed returns, things go from bad to worse when the feds come 469 00:31:03,130 --> 00:31:04,130 calling. 470 00:31:14,600 --> 00:31:18,500 In the spring of 2007, Raffaello Fogliari is under fire. 471 00:31:18,920 --> 00:31:23,860 His business partner, Ron Burkle, has sued him for misappropriating $1 .3 472 00:31:23,860 --> 00:31:28,680 million. And dozens of former investors and creditors are hounding him, 473 00:31:28,780 --> 00:31:30,400 demanding their money back. 474 00:31:30,760 --> 00:31:35,820 This was a very dramatic time for Raffaello because he'd at least for a 475 00:31:35,820 --> 00:31:41,620 lost the love and money of Ron Burkle. So he desperately needed a new backer. 476 00:31:42,080 --> 00:31:46,960 But Follieri is seemingly oblivious to the storm surrounding him. In September, 477 00:31:47,040 --> 00:31:50,580 he takes his girlfriend, actress Anne Hathaway, on a seven -day cruise around 478 00:31:50,580 --> 00:31:55,020 the Mediterranean aboard the 120 -foot luxury yacht, the Sun Grider. 479 00:31:55,480 --> 00:32:00,660 With paparazzi circling, the pair frolic in the crystal blue waters, jet ski and 480 00:32:00,660 --> 00:32:01,660 sunbathe. 481 00:32:02,500 --> 00:32:06,980 But back in New York, Follieri's staff has still not been paid, and the strain 482 00:32:06,980 --> 00:32:08,300 is beginning to take a toll. 483 00:32:08,860 --> 00:32:10,240 And he called us. 484 00:32:11,580 --> 00:32:17,360 From the yacht that he was on for the 485 00:32:17,360 --> 00:32:22,180 vacation. And he told us that he didn't have any more money. 486 00:32:22,760 --> 00:32:26,900 Issa Bernacco, Folieri's secretary, has not been paid in months. 487 00:32:27,360 --> 00:32:29,340 She's struggling to make ends meet. 488 00:32:29,740 --> 00:32:34,480 Every single penny that I had was to save my mortgage, save my home. 489 00:32:34,720 --> 00:32:36,660 He had given me a check and the check bounced again. 490 00:32:37,440 --> 00:32:41,820 And Bob Donnelly, Polieri's bodyguard, has been dealt a handful of worthless 491 00:32:41,820 --> 00:32:44,100 checks and months of excuses. 492 00:32:44,820 --> 00:32:48,560 I don't know how that could have happened. You know, there's plenty of 493 00:32:48,560 --> 00:32:52,380 that account, you know. You really get angry. You get pissed off. 494 00:32:52,640 --> 00:32:59,460 Because you see the way that he's throwing money away on himself, but yet 495 00:32:59,460 --> 00:33:01,660 doesn't pay you what you're legitimately entitled to. 496 00:33:02,660 --> 00:33:05,140 Polieri's employees are losing faith. 497 00:33:05,760 --> 00:33:08,060 The Yucaipa suit has crippled business. 498 00:33:08,800 --> 00:33:13,320 Employees were leaving him. He couldn't make payroll for any of his entities. 499 00:33:14,200 --> 00:33:16,540 And he was starting to max out his credit cards. 500 00:33:16,900 --> 00:33:21,260 Without Burkle footing the bill, Follieri is forced to move out of his 501 00:33:21,260 --> 00:33:25,580 apartment and into a spare bedroom at his parents' place in Trump Tower. 502 00:33:25,980 --> 00:33:29,420 Follieri was increasingly desperate at that time. 503 00:33:29,780 --> 00:33:33,540 Follieri needs a cash infusion fast and incredibly... 504 00:33:34,060 --> 00:33:39,500 He finds one in Plainfield Asset Management, a hedge fund based in 505 00:33:39,600 --> 00:33:40,600 Connecticut. 506 00:33:41,020 --> 00:33:46,200 Follieri came forward as the Vatican's guy in the States. 507 00:33:46,460 --> 00:33:51,500 It had a certain power, and I think that plus his innate charm did the trick. 508 00:33:52,420 --> 00:33:58,580 Plainfield Asset Management agreed to pay the 1 .3 to Burkle and to 509 00:33:58,580 --> 00:34:02,800 pay a million or more in various... 510 00:34:03,760 --> 00:34:06,380 outstanding expenses, credit card bills, stuff like that. 511 00:34:06,600 --> 00:34:09,679 So once again, it seemed, Ruffalo was up and running. 512 00:34:10,340 --> 00:34:13,679 By spring of 2008, the suit is behind him. 513 00:34:13,940 --> 00:34:18,800 But with all the negative press, Fogliari is becoming a target, and other 514 00:34:18,800 --> 00:34:20,199 creditors are descending fast. 515 00:34:21,219 --> 00:34:26,300 On April 3rd, Fogliari is arrested and hauled into jail to face misdemeanor 516 00:34:26,300 --> 00:34:27,820 charges for bouncing a check. 517 00:34:28,679 --> 00:34:32,400 One of his earlier investors is still out $215 ,000. 518 00:34:33,600 --> 00:34:38,060 And after months of haggling, Foglieri wrote him a check from an account that 519 00:34:38,060 --> 00:34:39,460 held just $39. 520 00:34:40,920 --> 00:34:44,820 Foglieri is released on bail, but his troubles are far from over. 521 00:34:45,440 --> 00:34:49,060 This is dated in March of 2006, which is essentially in the middle of the 522 00:34:49,060 --> 00:34:54,340 conspiracy. Behind the scenes, FBI Special Agent Ted Kachopi is covertly 523 00:34:54,340 --> 00:34:55,560 building a criminal case. 524 00:34:56,179 --> 00:34:59,840 It's a bit of a cliche, but at first you follow the money. You have to find 525 00:34:59,840 --> 00:35:02,060 where the money came from and find where it went. 526 00:35:02,430 --> 00:35:05,410 What he finds is a clear -cut case of fraud. 527 00:35:05,850 --> 00:35:09,210 It appeared that he was essentially stealing investor money to live his 528 00:35:09,210 --> 00:35:14,290 lifestyle. Have business cards of managers of all the expensive 529 00:35:14,290 --> 00:35:19,070 then have the expenses we could trace back to investors reflect nightly meals 530 00:35:19,070 --> 00:35:19,848 these restaurants. 531 00:35:19,850 --> 00:35:23,990 If you tell an investor, I'm going to do X, Y, Z with your money and intake the 532 00:35:23,990 --> 00:35:29,530 money and then don't do that and indeed spend the money on your dog walker and 533 00:35:29,530 --> 00:35:31,070 your home, that's illegal. 534 00:35:32,140 --> 00:35:37,000 Digging through Fogliari's bank records, Kachopi uncovers all the hallmarks of a 535 00:35:37,000 --> 00:35:38,000 money laundering scheme. 536 00:35:38,460 --> 00:35:43,380 I've worked complicated money laundering schemes, and Mr. Fogliari was not a 537 00:35:43,380 --> 00:35:45,440 technically adept money launderer. 538 00:35:46,220 --> 00:35:50,680 Fogliari had created shell companies with names like Keatsdale and Spiral 539 00:35:50,680 --> 00:35:55,280 Associates. He set up bank accounts in Monaco, and over a period of two years, 540 00:35:55,480 --> 00:35:57,840 he wired more than $2 million offshore. 541 00:35:58,560 --> 00:36:02,280 He lived an extremely lavish lifestyle. Even while he was intaking millions of 542 00:36:02,280 --> 00:36:06,460 dollars and stealing it, he was running up credit card bills even more than he 543 00:36:06,460 --> 00:36:07,800 could pay off with what he was stealing. 544 00:36:09,080 --> 00:36:15,100 And he wired more than $387 ,000 of Yucaipa's money to the Vatican, hoping 545 00:36:15,100 --> 00:36:16,100 win favor. 546 00:36:16,160 --> 00:36:20,760 Well, certainly, you know, Yucaipa is the largest victim in this case, but not 547 00:36:20,760 --> 00:36:21,760 the only one. 548 00:36:22,940 --> 00:36:27,820 Employees, creditors, and even members of the clergy were swindled by Foglieri. 549 00:36:28,410 --> 00:36:32,250 A monsignor loaned him his credit card, and he took him for $30 ,000 at one 550 00:36:32,250 --> 00:36:35,430 point. There were a lot of people who just were kind of burned financially, 551 00:36:35,670 --> 00:36:39,330 people who were embarrassed. There was this kind of thread of embarrassment by 552 00:36:39,330 --> 00:36:42,130 people who had been taken by this kind of Italian charmer. 553 00:36:43,230 --> 00:36:48,190 But with the Fed circling, Fogliari's biggest concern appears to be planning 554 00:36:48,190 --> 00:36:51,030 own 30th birthday party on the Isle of Capri. 555 00:36:51,750 --> 00:36:55,870 So confident or deluded was he. 556 00:36:56,560 --> 00:36:59,920 that the main thing he was worried about was planning his 30th birthday party, 557 00:36:59,980 --> 00:37:03,000 which was going to be this great blowout at a restaurant on Capri. 558 00:37:03,780 --> 00:37:09,040 Volieri and his friend and publicist, Melody Bonvicino, spend a weekend in 559 00:37:09,040 --> 00:37:10,840 working out all the details. 560 00:37:11,600 --> 00:37:16,660 Well, you know, certainly going back to Italy and celebrating in his homeland, 561 00:37:16,900 --> 00:37:20,980 his fatherland, was very important to him, inviting his friends and his 562 00:37:20,980 --> 00:37:25,140 and, you know, celebrating, even though it was a very difficult period for him. 563 00:37:25,740 --> 00:37:30,300 The party is just two weeks away, but Follieri insists on going back to New 564 00:37:30,300 --> 00:37:34,160 City. He's hoping to repair his relationship with Anne Hathaway. 565 00:37:34,500 --> 00:37:38,220 With all the bad press, the couple is on shaky ground. 566 00:37:38,800 --> 00:37:42,900 Well, how much Anne Hathaway is aware of is a fascinating question. 567 00:37:44,480 --> 00:37:50,180 She had to be aware that the foundation was not doing what it said it should do 568 00:37:50,180 --> 00:37:54,780 because she was on the board. And then here was this civil suit that Ron Burkle 569 00:37:54,780 --> 00:37:58,720 had filed. And yet she seemed to have complete faith in him. 570 00:37:59,500 --> 00:38:06,500 So was she snowed or did she just refuse to acknowledge those 571 00:38:06,500 --> 00:38:07,500 suspicions? 572 00:38:07,740 --> 00:38:11,100 Finally, after weeks of strain, Anne calls it quits. 573 00:38:11,600 --> 00:38:13,640 It's a devastating loss for Foliere. 574 00:38:14,160 --> 00:38:17,760 This is a woman he intended to spend the rest of his life with, clearly. 575 00:38:18,760 --> 00:38:23,260 News of the breakup becomes a tabloid sensation, and fearing that Foliere may 576 00:38:23,260 --> 00:38:27,520 a flight risk, Special Agent Ted Kachopi decides it's time to move. 577 00:38:27,900 --> 00:38:31,500 I told my prosecutor the next day that we should go arrest this guy right away 578 00:38:31,500 --> 00:38:38,400 because not only was the scam falling apart, but his girlfriend had also 579 00:38:38,400 --> 00:38:39,400 left him. 580 00:38:39,560 --> 00:38:45,860 On June 24, 2008, just after 6 a .m., Kachopi pounds on the door of Foglieri's 581 00:38:45,860 --> 00:38:47,420 parents' apartment at Trump Tower. 582 00:38:48,020 --> 00:38:49,620 Arrest warrant in hand. 583 00:38:50,080 --> 00:38:56,960 He appeared shocked, but I've been arresting white -collar criminals 584 00:38:56,960 --> 00:39:01,000 in New York for a number of years now, and they're always shocked. They never 585 00:39:01,000 --> 00:39:02,000 see it coming. 586 00:39:02,120 --> 00:39:06,940 Kachopi searches the apartment and finds a briefcase with $15 ,000 in cash. 587 00:39:07,600 --> 00:39:12,420 and a plane ticket to Italy in Fogliari's name, scheduled for the very 588 00:39:12,840 --> 00:39:18,320 And in a safe, a letter from Cardinal Angelo Sodano urging Fogliari to stop 589 00:39:18,320 --> 00:39:20,220 claiming he has ties to the Vatican. 590 00:39:20,580 --> 00:39:25,600 He did nothing but ramp up efforts to raise funds using the Vatican 591 00:39:25,600 --> 00:39:29,600 pitch after receiving this letter. 592 00:39:29,940 --> 00:39:34,820 The letter reads, I do not know how this distressing misunderstanding could have 593 00:39:34,820 --> 00:39:35,820 occurred. 594 00:39:35,850 --> 00:39:39,350 But it is necessary now to avoid such confusion in the future. 595 00:39:39,590 --> 00:39:45,150 I do therefore appeal to your sensibility to be careful respecting 596 00:39:45,930 --> 00:39:48,650 To me, that's the final nail in the coffin. 597 00:39:49,030 --> 00:39:54,030 But then Kachopi finds evidence suggesting something even more ominous. 598 00:39:54,270 --> 00:39:59,810 Mr. Polieri was attempting to replicate the fraud in other countries such as 599 00:39:59,810 --> 00:40:03,510 Canada and Brazil and Great Britain. 600 00:40:04,420 --> 00:40:09,340 Bollieri is cuffed and led downtown where he is charged with 12 counts of 601 00:40:09,340 --> 00:40:10,620 fraud and money laundering. 602 00:40:11,040 --> 00:40:13,420 His bail is set at $21 million. 603 00:40:14,800 --> 00:40:19,160 Instead of celebrating on the island of Capri, Bollieri will spend his 30th 604 00:40:19,160 --> 00:40:20,720 birthday behind bars. 605 00:40:21,240 --> 00:40:26,560 So the fact that Anne Hathaway's boyfriend was arrested and taken in 606 00:40:26,560 --> 00:40:32,000 and, you know, accused of being a conman, and that was big news. 607 00:40:33,320 --> 00:40:37,300 Three months later, facing mounting evidence against him, Fogliari pleads 608 00:40:37,300 --> 00:40:41,460 guilty. New York Times reporter Christine Haney is in the courtroom. 609 00:40:42,100 --> 00:40:46,800 He was kind of bone thin, and for someone who was just kind of always 610 00:40:46,800 --> 00:40:51,480 dressed, and his hair was always perfect and flawless, it was kind of messy and 611 00:40:51,480 --> 00:40:56,660 overgrown, and he looked unshaven. And for someone who always smelled lovely, 612 00:40:56,660 --> 00:40:58,640 had this smell that permeated the courtroom. 613 00:40:59,540 --> 00:41:02,420 Fogliari is sentenced to four and a half years behind bars. 614 00:41:03,070 --> 00:41:08,590 and ordered to forfeit $2 .4 million, including 13 designer watches and 11 615 00:41:08,590 --> 00:41:10,730 pieces of jewelry he had given to Hathaway. 616 00:41:11,150 --> 00:41:16,170 He had bought a lot of expensive jewelry for his girlfriend, and she didn't seem 617 00:41:16,170 --> 00:41:20,090 to want to have anything to do with these things anyway, and did indeed turn 618 00:41:20,090 --> 00:41:21,090 them over to the government. 619 00:41:21,270 --> 00:41:26,130 It's a dramatic fall from grace for Foglieri. He went to hell in a handcart 620 00:41:26,130 --> 00:41:29,650 hurry. It was to nobody else's fault but his own. 621 00:41:32,410 --> 00:41:37,530 just really symbolizes this tremendous fall from this gilded age we had in, you 622 00:41:37,530 --> 00:41:40,930 know, New York City at the time. He was at the heart of the real estate boom. He 623 00:41:40,930 --> 00:41:44,790 was at the heart of the lending world. He had a beautiful girlfriend who was an 624 00:41:44,790 --> 00:41:49,610 actress. He hung out with former presidents and duchesses, and here he is 625 00:41:49,610 --> 00:41:54,150 prison scrubs, and he's skinny, and he's unshaven. It's very tragic. 626 00:41:54,970 --> 00:41:59,110 Raffaella Foglieri is behind bars at a federal prison in Pennsylvania. 627 00:41:59,930 --> 00:42:02,530 He is scheduled to be released in May of 2012. 628 00:42:03,050 --> 00:42:05,050 He will be 33 years old. 629 00:42:06,090 --> 00:42:11,450 He will come out of this bigger, better, brighter, stronger, and certainly he's 630 00:42:11,450 --> 00:42:14,070 a resilient young man, clearly, very resilient. 631 00:42:14,390 --> 00:42:18,870 In the end, some believe that Follieri's own ambition and greed were his 632 00:42:18,870 --> 00:42:23,790 downfall, that the fame he so desperately sought made him a target. 633 00:42:24,150 --> 00:42:28,010 If he hadn't been with Anne Hathaway, federal prosecutors would never have 634 00:42:28,010 --> 00:42:29,010 bothered him. 635 00:42:29,120 --> 00:42:35,440 Those prosecutors had to know that in busting Fulieri, it would be a big news 636 00:42:35,440 --> 00:42:40,940 story, and that had to be part of the reason they went to such lengths to 637 00:42:40,940 --> 00:42:44,100 someone who was ultimately a small potato. 638 00:42:44,520 --> 00:42:48,520 I don't know if he's truly sorry for what he did. I'm sure he's sorry he got 639 00:42:48,520 --> 00:42:53,280 caught. Mr. Fulieri wanted everything good in life without working for it. All 640 00:42:53,280 --> 00:42:55,840 the evidence pointed to just pure greed.