Multiple Choice: What Should Have Tipped Anne Hathaway That Her Ex-Boyfriend Was Big Trouble?

The downfall of Italian playboy Raffaello Follieri was as dramatic as his climb. Before his arrest in June on multiple counts of fraud, the handsome 29-year-old seemed to have the grail of success firmly in hand: a big-bucks real estate business, a New York penthouse and a glamorous girlfriend, "Get Smart" movie star Anne Hathaway. Now it has all slipped his grasp—and the picture emerging is that of a striver-at-all-costs, the son of an auto mechanic who charmed and tricked his way into the most exclusive pockets of American society.

Follieri's early life was littered with false starts. Born in southern Italy, he studied the "manufacture of cosmetics" at Rome's University of La Sapienza but dropped out before graduating. At about the same time, Raffaello's father, Pasquale, lost his auto shop and started passing bad checks and practicing law without a degree, according to the Italian press. Together they founded the Rome-based makeup company Beauty Planet, but it never turned a profit and bounced more than $50,000 in bad checks before going bankrupt in 2002, according to Italian court documents obtained by NEWSWEEK.

Despite the failure, Follieri sold himself in New York in 2003, setting up a real-estate company called the Follieri Group LLC and using his aristocratic swagger to gain a foothold in society. There, he met Hathaway in 2004, and together they became an American "it" couple, the girl-next-door and the international financier. But while her career was built on leading roles in successful films such as "The Devil Wears Prada," his real-estate business was built on air, according to federal prosecutors. He allegedly bilked investors—including Bill Clinton's close friend, supermarket billionaire Ron Burkle—out of millions of dollars by posing as the Vatican's "chief financial officer," blessed with the right to flip church properties in the United States. Like all scams, the one described by prosecutors seemed to rely on mutual greed, with investors lured by fire-sale prices for property that the Roman Catholic Church was supposedly unloading to settle pedophilia cases.

It's hard to imagine how Hathaway could have missed the red flags. Until last year she sat on the board of the Follieri Foundation and traveled with the Third World charity, according to press reports. "It's unlikely we will ever comment," says a spokesperson for Hathaway, who dumped Follieri in June. During Follieri's bail hearing, Assistant U.S. Attorney Reed Michael Brodsky described him as a "con man" who kept ceremonial robes in his office, paid a former Vatican administrator to introduce him to high-ranking church clergy and hired a pair of monsignors to flank him at meetings with investors—all to bolster the appearance of ties to the pope. Prosecutors allege that the $6 million he raised was used to fund the high life: a $37,000-a-month Manhattan apartment and hundreds of thousands of dollars for dog-walking services, flowers and wine.

Follieri's mask has been slipping for years. The Vatican issued a statement in 2005 denying all ties to the Follieri Group, while an Italian court convicted Pasquale Follieri of nicking $300,000 from investors in a separate resort scheme. Burkle sued Follieri in civil court in 2006, alleging that the Italian was using seed money to pay for personal extravagances. But all that was prelude to the recent raid: authorities burst into Follieri's Fifth Avenue penthouse just before dawn, and by nightfall he was facing prison. Follieri entered no plea, and his lawyer said he was hopeful for a successful resolution. After all, there's a fool born every minute.