Celebrities have to pay back ill-gotten gains(investment fraud)

TheSmokingGun ^ | 07/17/03 | TSG

[Pikamax]

The Big Payback Diaz, Morissette among celebs returning ill-gotten gains

JULY 17--Three years after the conviction of Dana Giacchetto and the implosion of his New York investment firm, former celebrity clients of the disgraced money manager are beginning to pay back money that Giacchetto improperly diverted to them from the accounts of his less-fabulous clients, federal court records show.

As a result of "fraudulent conveyance" lawsuits filed last year by the court-appointed trustee handling the Cassandra Group's bankruptcy, Cameron Diaz, Alanis Morissette, actor Tim Roth, screenwriter Richard LaGravenese, and Richard Lovett, president of the powerful Creative Artists Agency, have all recently reached legal agreements to return funds that will be used to repay Cassandra's myriad creditors.

While trustee Robert Geltzer does not allege that the stars participated in wrongdoing, a lack of intent is no defense against what the lawsuits refer to as a "fraudulent transfer" that has resulted in an "unjust enrichment" for the boldfaced names. When Giacchetto's stock fund began cratering, he stole money from the accounts of ordinary clients and gave the cash to his celebrity clientele, claiming that it represented investment gains. Giacchetto, who once counted Leonardo DiCaprio as his best friend, left federal prison for a Bronx halfway house earlier this year after serving about three years for fraud. The 40-year-old swindler is now under home confinement, which ends on July 28.

In the recent financial settlements, Giacchetto's former clients paid back roughly half what Geltzer had sought from them. For example, Diaz coughed up $100,000, after being sued for $208,600, while Lovett returned $75,000 after being sued for $150,000 (for a copy of the six-figure settlement agreement entered into by Diaz, click here). The trustee has also has received money from Roth ($60,000); LaGravenese ($90,000); Morrissette ($1800); DiCaprio's father George ($2000); and composer Philip Glass ($2500).

But some of the largest sums being sought by Geltzer remain the subject of litigation. Former Cassandra Group clients being chased by the bankruptcy trustee include: actors Tobey Maguire ($350,000); Courteney Cox ($228,727); Ben Stiller ($96,094); Jon Favreau ($19,027); Jay Ferguson ($29,000); and Dan Cortese ($53,125); musicians Steve Van Zandt ($150,000); D'Arcy Wretsky ($227,458); and James Iha ($215,334); felonious financier Ivan Boesky ($305,000); artist Ross Bleckner ($25,113); TV reporter/gubernatorial offspring Chris Cuomo ($81,496); filmmaker/Bob's son Jesse Dylan ($109,480); hip hotelier Andre Balazs ($82,532); fallen Hollywood titan Mike Ovitz ($48,173); and Ford Models ($521,041). Click here to view the complaint Geltzer filed against Cox, which is representative of the trustee's other "fraudulent transfer" lawsuits.

[garbanzo]

Courteney Cox ($228,727)

Less than what she makes per episode of Friends.