Take The Money And Run

Leonardo Dicaprio used to hang out at Dana Giacchetto's loft. Courteney Cox took him on vacation. Everyone--Ben Affleck, Cameron Diaz, Alanis Morissette--gave the hip investment adviser money. Giacchetto promised to invest it conservatively. "A lot of numbers make me nervous," Cox said once, "but Dana really cares about helping me understand how it works." According to the Securities and Exchange Commission, Giacchetto borrowed $825,000 from Cox's portfolio, apparently to pay office bills and cover losses on other accounts. He probably never explained that part to Cox--that would have made her really nervous.

Last week Giacchetto, 37, surrendered to authorities at the FBI office in Manhattan. The Feds say that the money manager, who ran an investment company called the Cassandra Group, illegally took control of about $20 million in client funds. At least some people got their money back, but Giacchetto still faces a $1.25 million fine and 15 years in prison. Giacchetto's lawyer declined to comment. The SEC says the investment guru managed a Ponzi scheme in which celebrities he deemed important enough were paid with money stolen from less famous clients. "Dana was someone who'd do anything to salvage his relationships with his clients," says a source familiar with Giacchetto. "He saw Brad Pitt as more important than the president."

In 1998 Giacchetto formed a $100 million partnership with Chase Manhattan, and allegedly began funneling his clients' money into risky investments. Clients began asking questions about inconsistencies in their financial statements. Late last year at least 17 of them dropped him. According to court papers, the Cassandra Group is $2.2 million in the red. Giacchetto is believed to be penniless. "He is an investment adviser with no long-term planning for himself," says the source. Not to worry. The government has plans for him.