Follieri is arrested and charged with trying to pass a bad check for around $215,000. In May, the charges are dropped, but the arrest is the latest in a line of legal troubles for the 29-year-old Italian real estate developer. In June, after Follieri is put under investigation by the New York State Attorney General's office, he and Hathaway split. After the split, Follieri is arrested on a dozen counts of wire fraud conspiracy and money laundering. He is put under a $21 million bail and spends his 30th birthday behind bars in June.
While dealing with the pain of her breakup, Hathaway keeps a game face as she promotes Get Smart. She plays sexy, competent Agent 99 to Steve Carell's Maxwell Smart in the big-screen adaptation, which opens at No. 1.
Of all the victims Follieri allegedly duped, Hathaway fell the hardest, friends of the 25-year-old actress tell PEOPLE. Believing she found her prince charming in Follieri, Hathaway told PEOPLE in 2006 that he was a keeper. But when she learned that Follieri's charitable foundation was under investigation for tax irregularities, the actress – who served on its board and was a donor – broke off the relationship. A pal says, "That was the last straw."
As her ex pled guilty to all 14 counts (he's later sentenced to 4 ½ years in prison), Hathaway appears on the cover of W, where she opens up about putting on a brave face during her well-publicized split. "Right now I don't have the wherewithal to be anything except professional," Hathaway says. "I have to find a place to live," she adds. "It's a situation where the rug was pulled out from under me all of a sudden."
Hathaway's role as a rehabbed drug addict in Rachel Gets Married nabs her an Oscar nomination for Best Actress, and lands her on the cover of EW. Following performances in weightier projects and a summer spent dealing with the fallout from her ex's legal troubles, the magazine says Hathaway is a "princess no more." "When I turned 25, I realized I was never going to be precocious again," she says. "And I was really happy about that...Now I feel like I can just be an actress."
Hathaway stars in Bride Wars, where she rivals with her best friend (played by Kate Hudson) after their weddings are schedule on the same day. "This movie is really about a female friendship and what it's like to grow up with your friends and how your relationships change," Hathaway says on NBC's Today. "And so it's not just about...two girls fighting it out to get the better dress, it's actually about two girls growing up.
Hathaway earns rave reviews for her performance in a production of Twelfth Night at New York's Central Park. Offstage, the actress tries her luck at love again with actor Adam Shulman, who she’s spotted with in New York and L.A.
Hathaway stars as the kind-hearted White Queen alongside Johnny Depp in Alice in Wonderland. "I was so thrilled every day to be made in to a Tim Burton heroine," she says of her gothic look, featuring white hair and black lipstick. "When I was trying to work her out, I kept saying to myself, 'She is a punk-rock, vegan pacifist.'"
Hathaway and Jake Gyllenhaal strip down for EW, and open up about disrobing for Love and Other Drugs. "Jake and I were in this amazing take, and he turned and caught the sheet and pulled it off me," she says of her two-time costar's on-set hijinks. "And I wasn't going to yell 'Cut.' I just thought, 'Go with it, Hathaway. If it was theater, you would go with it.' And I did. And of course that is the take that is in the movie."
At 27, Hathaway emcees the 83rd Academy Awards alongside James Franco, making her the youngest star ever to host the ceremony. Appearing onstage in seven designer ensembles, the actress infuses the show with her trademark zeal, but ratings fall 9 percent from last year's telecast. Despite this, her efforts don't go unnoticed: "Hathaway worked her derriere off," The Washington Post praises of the first-time host.
BIOGRAPHY (top to bottom): Johns PkI/Splash News Online; Tracy Bennett/Warner Brothers; Courtesy of W; Courtesy of EW; Claire Folger/Twentieth Century FOX; Tom Meinelt/Splash News Online; Disney; Getty