Fox 411: The Dana Giacchetto Story, Part 1

First of five parts

From Prada to Prison: The Dana Giacchetto Story

Considering the original lived as a master showman, it's fitting that the name of Dana Giacchetto's personal shopper at Prada was Ed Sullivan. Of course, not many money managers have personal shoppers, let alone at the boutique of the designer of the moment.

The irony is probably lost on Giacchetto, who awaits sentencing Wednesday in federal prison in Brooklyn for stealing $20 million from celebrities, friends, family and civilian clients.

Gone are his Cassandra Group investment firm, his cockatoo, his huge Soho loft, famous friends like Leonardo DiCaprio and Courteney Cox and his pricey art collection. What's left are a lot of angry, bitter people, some of whom have lost life savings and who wonder how they could have been taken in by a nerd with whom they trusted their futures.

"He was a nice man," recalled Sullivan, his personal shopper. Maybe. But Sullivan never saw a piece of conceptual art by Bruce Nauman that Giacchetto proudly hung in his Soho loft. Its title, inscribed across the canvas in neon: "Pay Attention Motherf-----s!"

If only someone had paid attention to their financial statements, to Giacchetto's penchant for name-dropping, to his Ripley-ness, a lot of people might not be so bitter now.

This "financial advisor" led many lives. The construct of his existence in New York as a player, as the Dude, was built from fabrications, misstatements and confusion.

He bragged of a Harvard M.B.A. and other achievements (all disproved by this reporter last December in The New York Observer). In reality, he barely graduated from a commuter college and failed the simplest of tests administered by the Securities and Exchange Commission.

What his clients didn't know — and don't know even now — is how he managed to keep everyone in the dark, even those closest to him, until it was too late to rectify his mistakes.

He managed to swindle some of Hollywood's best-known names, from smart, educated agents to clueless box-office stars. In his little black book he had the personal numbers for Julia Roberts, Tobey Maguire, Cameron Diaz, the DiCaprio family, Michael Stipe, screenwriter Richard LaGravanese, Courteney Cox and four numbers for the all-powerful Michael Ovitz (Aspen, Antigua, boat and boat's captain).

He even managed to draw in a famous New York political family, the Cuomos, whose youngest son, Christopher, served as Giacchetto's pal, confidant and legal adviser. (Cuomo worked for Giacchetto longer than most thought — even notarizing Giacchetto's uniform application for investment adviser, dated March 31, 1999.)

Giacchetto pleaded guilty to securities fraud on August 2, 2000. He has been in prison since April, so his likely sentence will be three more years.

On the day he pleaded guilty, though, he wept openly in court as he told Judge Ronald Patterson he had become overwhelmed by his business and that "as a child I was an artist" and noted he always thought he'd been "put on Earth to do good things."

But good works weren't on Giacchetto's mind in the fall of 1999, when his self-promoted, much-ballyhooed Cassandra Group went into a tailspin.

After two or three years of partying hard with the likes of DiCaprio and friends, Giacchetto's luck was running out. Clients were starting to ask questions about missing funds. If Dana had made them as rich as he claimed, then where was the money?

The Securities and Exchange Commission had also been asking questions, as early as 1995 and 1997. In both years, they wrote to him with concerns about his custody of clients' funds, which money managers are not allowed to access. They simply advise the client, and deals are transacted through a clearinghouse.

Almost all of Giacchetto's transactions went through Brown & Co., a respected Boston discount brokerage firm. Dana bragged to his pals that he and George Brown, the now former owner, had a close relationship.

Not everyone agrees. "A few times George came to the New York loft," said a former Cassandra employee. "But I don't think he was very impressed."

Giacchetto was able to dip into any account handled by Brown & Co. simply by calling up and asking for checks to be issued in clients' names. Brown would then FedEx the checks to Giacchetto, who endorsed them and deposited them in his own account at what was then called U.S. Trust, now Citizens Bank. By this method, Giacchetto was able to use money belonging to others to create the illusion he was a brilliant money man.

The true horror is that in that little black book, side-by-side with Cameron Diaz, are lists of names with direct lines at Brown & Co., U.S. Trust/Citizens, Lehman Bros. and his personal accountant at the Boston-based firm of Vance Cronin Stephenson, with annotations about their responsibilities. They were Giacchetto's unwitting accomplices.

Not all the celebrities in his orbit were hoodwinked. Two who bolted from Giacchetto's clutches early on were Matt Damon and Ben Affleck, prompted by Damon's father, Kent, who has a financial-management background.

"I spent a lot of time getting them out of there," said Kent Damon. "I was always uncomfortable with the statements. And the boys didn't care for Dana dropping their names all the time. They're pretty low-profile."

Affleck agreed. "We didn't like him using our names. But the real reason we fired him was all that 'Get me Leo' stuff," he said, referring to a New York Times Magazine article in which Giacchetto was described as a wunderkind. "That was when I knew something was wrong."

Affleck, who was recently deposed by phone by the SEC, said the interviewer told him: "If it makes you feel better, you got out early."

Damon and Affleck were introduced to Giacchetto by their accountant, Jerry Chapnick, a heavyweight Hollywood type who had even put his own money in with Cassandra Group and was satisfied Giacchetto was on the up-and-up.

But in January 1999, Giacchetto ordered checks of $100,000 each from Affleck and Damon's Brown accounts and made unauthorized investments with the money. When Chapnick discovered what had happened, he wrote to Giacchetto and got no response.

In January 2000, with pressure on him to do so, Chapnick himself did the extraordinary — he reimbursed both actors.

Affleck confirmed this. "Jerry took care of it."

Nevertheless, the pair — whom Chapnick had worked with since Good Will Hunting — fired him. Chapnick declined to comment for this article.