Page last updated at 01:01 GMT, Wednesday, 25 June 2008 02:01 UK

Developer 'used Vatican in scam'

Rafaello Follieri (L) was boyfriend of Anne Hathaway, file image 02/08
Mr Follieri was romantically linked to Hollywood actress Anne Hathaway

An Italian-born businessman has been charged in a US court with inventing Vatican connections to dupe investors out of millions of dollars.

Raffaello Follieri, 29, told potential investors he could buy land owned by the Catholic Church in the US at bargain prices, prosecutors say.

But instead he used their money to fund a lavish lifestyle.

Mr Follieri gained a high profile when he was the long-term partner of actress Anne Hathaway. He did not enter a plea.

'Overwhelming evidence'

According to the indictment unsealed in Manhattan's District Court, the businessman told potential clients that the Vatican had formally appointed him to manage its financial affairs.

In short, your honour, he is a con man, and he was able to defraud a lot of people out of a lot of money over a long period of time
Prosecutor Reed Michael Brodsky

To bolster his claims he kept various ceremonial robes at his office in New York, including those of senior clergymen, according to witnesses cited by the prosecution.

He also allegedly hired two clergymen to help with his business, and asked one clergyman to dress up in the vestments of a more senior rank.

From 2005 to 2007 he received millions of dollars from an unnamed private equity firm, which he used to fund an upmarket Manhattan flat and charter private jets.

Mr Follieri has been charged with several counts of fraud, money laundering and conspiracy.

Assistant US Attorney Reed Michael Brodsky said the evidence against Mr Follieri was "overwhelming".

"In short, your honour, he is a con man, and he was able to defraud a lot of people out of a lot of money over a long period of time," Mr Brodsky said.

The prosecutor argued for detention without bail.

Mr Follieri was released on bail of $21m (10.6m), his passport was confiscated and his movements have been restricted to within Manhattan.

If convicted, he faces up to 20 years in prison.

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