Raffaello Follieri, 29, was awaiting an initial appearance in U.S. District Court in Manhattan after the unsealing of a criminal complaint charging him with a dozen counts of conspiracy to commit wire fraud and money laundering.
Follieri was accused in the complaint of portraying himself as the Vatican's representative in the United States to obtain real estate at below-market prices. Prosecutors claim he used those false claims to obtain money from investors, including millions of dollars from a private equity firm based in California. The name of the firm wasn't included in the complaint.
According to the complaint, Follieri spent hundreds of thousands of dollars he obtained from investors on an opulent lifestyle, including privately chartered flights to travel around the world with friends and family, expensive meals and clothing, a posh apartment in Manhattan and medical expenses.
The name of Follieri's attorney could not immediately be determined.
According to the FBI, Follieri claimed the Vatican had formally appointed him to manage its financial affairs and that he had met with the pope in person in Rome. He allegedly told investors that because of those connections, he could obtain Roman Catholic church properties in the United States at bargain prices.
According to the complaint, his actual connections to the Vatican amounted to attending meetings with members of the clergy in Italy arranged by an administrative employee whom he paid using money from his principal investor.
Prosecutors said Follieri went to great lengths to embellish the appearance of connections to the Vatican, including using money from the principal investor to hire two monsignors in the United States for his business dealings.
The plan unraveled when the principal investor, whose name was not disclosed, sought an audit of his partnership with Follieri and demanded an explanation for lavish expenditures unrelated to administrative overhead or the business expenses of purchasing real estate.
Earlier this month, the New York attorney general's office said it was investigating a foundation operated by Follieri that vaccinates children in Third World countries.
The Follieri Foundation has not filed U.S. tax disclosure forms required from charities, according to a review of records by The Associated Press.
Hathaway's publicist, Stephen Huvane, has previous stressed that "The Devil Wears Prada" star is not part of any probes and is no longer a board member of the Follieri Foundation.