Celebrity investors allegedly ripped off by Hollywood money manager Dana Giacchetto are demanding that three deep-pocked banks – including Chase Manhattan – cough up the looted millions.
Giacchetto is accused of siphoning clients’ cash from bank and brokerage accounts under the noses of usually watchful bankers, according to angry investors and investigators at the Securities and Exchange Commission.
“The whole idea of a bank is to safely hold your money and not give it away to just anyone who asks for it,” said David Comarow, an attorney for critically acclaimed New York painters Robert and Cara Ginder, who lost much of their $600,000 nest egg to Giacchetto.
The Ginders, whose paintings are exhibited at OK Harris Gallery, are two of the first investors to go public over their formal demand that banks make full restitution.
If the banks don’t pay by next week’s deadline, they’re joining a broader class-action suit aimed at recovering investors’ lost money, said their lawyer.
Investors from New York to Hollywood are being interviewed for the class-action suit by well-connected securities law firm Meyers & Heim, formed five months ago by two of the SEC top’s ex-enforcement officials, Robert Heim and Howard Meyers.
The three banks are in the gun sights of Giacchetto’s victims, because Giacchetto managed to loot their funds from the institutions and their subsidiaries despite usual safeguards at the companies, the SEC said.
Giacchetto kept investor funds at Chase Manhattan’s brokerage, Brown & Company but routinely got employees there to cut more than 100 checks in his clients’ names and send the checks directly to Giacchetto via Federal Express, authorities say.
Instead of turning over the checks to his clients, Giacchetto would endorse them with his own name – even though they were made out to clients – and deposit them in his own accounts at U.S. Trust/Citizens, after BankBoston cleared them for payments, authorities say.
“My clients are as angry at the banks as they are at Giacchetto for treating their money so haphazardly,” said Comarow.
Lawyers for Brown & Co. had no comment. U.S. Trust/Citizens, a $5.5 billion bank owned by Royal Bank of Scotland, also had no comment. BankBoston, recently acquired by Fleet Financial, did not return calls.
Meanwhile, another of Giacchetto’s clients, Leonardo DiCaprio, acknowledged that he lost part of the $1 million he entrusted with the 37-year Giacchetto, who’s now in jail for trying to flee the country while under indictment for the frauds.
Investigators are following leads to off-shore accounts in a worldwide hunt for the missing money of Giacchetto’s alleged Ponzi scheme.
As much as $11 million is thought to be missing from the accounts of Giacchetto’s client roster, which included Cameron Diaz, Matt Damon, Lauren Holly, Ben Affleck, Bob Dylan and Steven Spielberg’s wife, Kate Capshaw.
The SEC says that Giacchetto stole money from lesser-known clients to pay off celebrity investors who wanted to bail out.