Hollywood Advisor Surrenders to FBI in Alleged Fraud Case

NEW YORK —  A stocking cap pulled to his nose to hide his face, Dana Giacchetto surrendered to FBI agents Tuesday in New York City to face federal fraud charges while his lawyers argued that the Gen-X Hollywood money manager should be allowed to continue to use his “schmooze factor” as a “finder” of deals for entertainment clients.

Giacchetto, 37, charged with three criminal counts for allegedly looting more than $6 million of his clients’ funds, gave himself up shortly before noon. News photographers captured the bizarre sight of Giacchetto in the stretched-out stocking cap being led by FBI agents. According to reporters on the scene, Giacchetto made an obscene hand gesture at photographers trying to take his picture.

At an afternoon hearing, Giacchetto was released on a $1-million personal bond secured by his parents’ signatures and their $500,000 home in Medford, Mass.

A onetime money manager to such stars as Ben Affleck, Matt Damon, Ben Stiller, Leonardo DiCaprio and Courteney Cox Arquette as well as entertainment power broker Michael Ovitz, Giacchetto was named in a criminal complaint Monday that alleged he funneled some $20 million of client funds through his own account as part of an elaborate fund-kiting scheme. He also is being accused of lying to the U.S. Securities and Exchange Commission.

Authorities allege he used the money to finance a posh lifestyle that often involved traveling the world to hang out with DiCaprio and other celebrities. They also claim he used the funds to cover the tracks of his failed investments and even what authorities allege was outright theft by paying off one group of defrauded clients with funds from other clients. Giacchetto was out of the country at an undisclosed location Monday when the complaint was filed.

Dressed in a brown sport coat, the boyish Giacchetto appeared nervous at the hearing, frequently glancing back at his parents who were sitting in the packed courtroom. Giacchetto spoke only to confirm to U.S. Magistrate Andrew Peck that he understood his rights.

Giacchetto’s lawyer, Andrew Levander, argued at Monday’s hearing that Giacchetto should be allowed to travel and earn money through “finder’s fees” in a vaguely described business of introducing his Hollywood contacts to people. Giacchetto needed to be able to travel to Los Angeles to use “the schmooze factor” to personally introduce his contacts to each other. “He has made lots of contacts over the years with people who still have confidence in him,” Levander said.

The work, said his attorney, would not involve giving investment advice or handling money. Levander also argued that Giacchetto is not a flight risk, citing his voluntary return to the U.S. to face the charges.

Assistant U.S. Atty. David Raymond Lewis expressed skepticism, citing “a pattern of extraordinary brazenness by Mr. Giacchetto with other people’s money” and Giacchetto’s alleged use of forged documents.

Peck, who expressed skepticism that anyone would do business with Giacchetto at this point, said a court order freezing Giacchetto’s assets would prevent him from escaping.

“Assuming Mr. Giacchetto can get on a Greyhound bus and stay in a Motel 6 with the last suit he owns on his back, to go schmooze with someone in California in the business, why should we all care?” Peck said.

Lieberman reported from New York. Bates reported from Los Angeles.