NEW YORK — Money manager Dana Giacchetto, charged with allegedly stealing $6 million from his celebrity clients, was released on a $1 million bond Tuesday and announced plans to start a new business of “finding” actors for producers and studios.
Giacchetto, owner of the Cassandra Group investment firm that once touted a star-studded clientele of rock bands, actors and artists, surrendered to authorities Tuesday morning. He later appeared at a bond hearing in Manhattan Federal Court looking disheveled in a brown pinstriped suit and pastel checkered shirt.
At the hearing, his lawyer, Andrew Levander, said Giacchetto would agree to post a $1 million personal recognizance bond if he could travel within the United States to promote his new business as a “finder” in the entertainment industry.
“He has lots of contacts over the years with people who still have confidence in him,” Levander said.
Parents bailed him out
Giacchetto’s bond was secured by his parents’ $500,000 home in Massachusetts. He will be allowed to travel only after getting permission from the court’s pretrial services department and submitting his travel plans to prosecutors.
Although the government argued that Giacchetto could flee if allowed to travel, U.S. Magistrate Judge Andrew Peck said that a court order issued Monday freezing his assets except for living expenses 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.
On Monday, Giacchetto, 37, was charged — in a criminal complaint filed by the federal prosecutors and a civil suit filed by the U.S. Securities and Exchange Commission — with orchestrating a scheme in which he allegedly siphoned off clients’ funds to pay for everything from loft space in New York’s trendy Soho district for Cassandra’s operations to his own personal expenses for travel, dining and entertainment.
The charges allege that Giacchetto also used money to make unauthorized donations, including $90,000 to the New York Arts Academy and $12,000 to a law enforcement officer for a down payment on a Mercedes-Benz.
Once, Giacchetto was a top financial adviser to the Hollywood and New York jet set. His client list had included superagent Michael Ovitz, the rock group Phish and thesps Matt Damon, Leonardo DiCaprio, Ben Affleck and Cameron Diaz.
But the list began to dwindle when allegations surfaced last fall that he was mishandling money and was under investigation by federal authorities.
Fear of more crimes
Assistant U.S. Attorney David Lewis told Peck that the government was also concerned that provisions of the bond would allow Giacchetto to commit fresh crimes by starting the “finder’s fee” business.
He said evidence against the money manager shows a “pattern of extraordinary brazenness by Mr. Giacchetto with other people’s money.” Lewis said Giacchetto allegedly continued to break the law even after his home was searched by authorities last month.
Defense lawyer Levander argued that the business Giacchetto proposes would involve taking finder’s fees for his services, not managing other people’s money.
Peck questioned why Giacchetto would need to travel, saying he thought that much of the entertainment business is “based on the schmooze factor” and could be accomplished on the phone.
But Levander said personal contact is essential in that field. “The schmooze factor is the business — it is the essence of that business.”