×
You will be redirected back to your article in seconds

Giacchetto gets the max

Money manager sentenced to 57 months

Dana Giacchetto, disgraced money manager to the stars, was sentenced Wednesday in U.S. District Court in Manhattan to 57 months in prison, the maximum possible under a plea agreement, for defrauding a bevy of clients of $9.8 million.

Giacchetto apologized to the courtroom and to the prosecution attorneys in a disjointed speech during which he burst into tears and begged for forgiveness from victims, saying, “I am truly sorry. I want to do anything I can to make reparations. I started the Cassandra group to help artists. I’d like to apologize to all of them who are here.”

Bursting into tears, he added, “I also lost one of my best friends who hung himself.” (Jay Maloney, former CAA agent, took his own life in November 1999.)

Continuing to cry, Giacchetto said, “If there’s a message to anyone on Wall Street who thinks this can’t happen, it can.”

In August, Giacchetto pleaded guilty and entered into a plea agreement with the U.S. attorney’s office. He acknowledged misappropriating between $5 million and $10 million from clients of his Cassandra Fund. Under federal sentencing guidelines, he faced between 46 and 57 months in federal prison.

In giving Giacchetto the maximum sentence under the agreement, U.S. District Court judge Robert Patterson Jr. took into account both the size of the fraud along with other factors.

Warning shot

At the hearing, Patterson said he wanted the sentence to send a message to others in a position of trust in the financial community and to act as a deterrent. The judge also expressed displeasure over the fact that Giacchetto had invoked the Fifth Amendment during his recent depositions in the related Securities & Exchange Commission and bankruptcy cases, but said that did not affect the sentence.

Giacchetto will end up serving about three years with credit for time served. Still undetermined is where he will carry out his sentence. His attorney, Ronald Fischetti, requested a minimum-security facility.

“We’re happy it’s over. We were hoping for a lighter sentence, but at least Dana has some closure,” Fischetti said after the hearing.

In a letter submitted by the government as part of the sentencing process, assistant U.S. attorney David Lewis, who handled the case, pointed out that the $9.8 million in losses represented money that was stolen. In addition, several million dollars were misappropriated from client accounts, but later returned.

The government stressed that in most cases, Giacchetto took funds from his celebrity clients’ accounts only temporarily and ultimately reimbursed them.

It was the less well-known, less affluent investors who were left to endure the losses, while the rich and famous continued to get good returns.

Civil suit pending

Still pending is the civil suit by the SEC, which was filed at the same time the feds pressed criminal charges, as well as the bankruptcy case involving Giacchetto’s Cassandra Fund. In July, a court-appointed receiver filed a Chapter 7 proceeding in U.S. Bankruptcy Court in Manhattan. The filing revealed the fund had assets of less than $25,000.

The strange saga began in December 1999, when Giacchetto abruptly lost many of his high-profile clients. Until then, he had managed accounts for, among others, Cameron Diaz, Leonardo DiCaprio, Ben Affleck, Matt Damon and AMG’s Michael Ovitz and Rick Yorn.

In April, Giacchetto was charged by criminal complaint with looting accounts belonging to clients of his Cassandra Fund. The same day, the SEC filed its related action and a court froze Giacchetto’s assets.

While free on bail, Giacchetto was arrested at the Newark, N.J., airport with $44,000 in airline tickets to Tokyo, Singapore, Frankfurt and Rome, plus an altered, expired U.S. passport. He has been incarcerated since his flight attempt.

In August, Giacchetto pleaded guilty to violation of the Investment Advisers Act, one of the five counts in the original indictment.

More Biz

  • Sean "Diddy" Combs Revolt TV

    Sean Combs Slams 'Illusion of Economic Inclusion' at Comcast Amid Byron Allen Fight

    Sean Combs has come out swinging against Comcast in a lengthy statement prompted by the cable giant’s legal battle with Entertainment Studios chief Byron Allen. Combs accused Comcast of maintaining “the illusion of economic inclusion” in its handling of a carriage agreement with Combs’ Revolt TV channel. Combs was critical of Comcast for failing to [...]

  • Bon Iver Justin Vernon Grammys

    Bon Iver, Tanya Tucker, Thom Yorke Lead Indie Labels to 44% of Grammy Nominations

    Ever since Arcade Fire’s “The Suburbs” won Album of the Year at the 2011 Grammy Awards, independent labels have seen their star rise on “Music’s Biggest Night,” and that looks set to continue at the 2020 ceremony, where Bon Iver, Radiohead’s Thom Yorke, Yola, Alabama Shakes’ Brittany Howard, Elvis Costello and others have gotten big [...]

  • US Capitol

    Congress Introduces AM-FM Act to Revise Copyright Law for Terrestrial Radio

    Senator Marsha Blackburn and Rep. Jerrold Nadler today introduced the Ask Musicians for Music Act (AM-FM), which aims to revise existing copyright law for radio stations and musicians. Under the current copyright system, radio stations can use sound recordings over their airwaves without paying royalties to creators who own a stake in the sound recordings. [...]

  • Harriet Tubman Cynthia Erivo

    AMC Theatres Fires Three Employees Over Racial Profiling Incident During 'Harriet' Screening

    AMC Theatres has fired three employees in one of its Louisiana multiplexes after an incident during a screening of “Harriet.” An African American women’s group called the 504 Queens allege that 15 members were racially profiled while watching “Harriet” at AMC’s Clearview Palace 12 in Metairie on Nov. 7. A letter sent from the organization’s [...]

  • Byron Allen

    Byron Allen's Discrimination Suit Against Comcast Should Be Allowed to Move Forward

    More than anything, the Supreme Court justices seemed bemused. Comcast executives and entrepreneur Byron Allen came to the nation’s high court on Nov. 13 to duke it out over the racial discrimination case that Allen’s Entertainment Studios has pursued since 2015.  But the question put before the court was a narrow issue of legal precedent [...]

  • Christine Baranksi Karey Burke Coutney Kemp

    Christine Baranski, Karey Burke and Courtney Kemp Set for Brandon Tartikoff Awards

    Christine Baranski, “Power” creator and showrunner Courtney Kemp and ABC Entertainment chief Karey Burke are among the five recipients set for the 2020 Brandon Tartikoff Awards, to be handed out in January as part of the annual NATPE conference in Miami. Jeff Zucker, chairman of news and sports for WarnerMedia and president of CNN Worldwide, [...]

  • BMI’s Charlie Feldman Retiring After 31

    BMI’s Charlie Feldman Retiring After 31 Years With Company

    Charlie Feldman, BMI’s Vice President of Creative in New York, announced today that he will retire from the company at the end of the year. A 31-year veteran of BMI, Feldman will continue to consult for the company in the new year, according to the announcement. Mike O’Neill, President and CEO of BMI, said, “I [...]

More From Our Brands

Access exclusive content