In the center ring was the bespectacled Giacchetto, who had a penchant for Prada suits, pet cockatoos and generally lavish living. "He was definitely the man," says Noel Ashman, owner of the Manhattan club Veruka. "Every party he had was better than the last."
Now the party is well and truly over for the flashy 38-year-old financier. In December Giacchetto, who admits he stole up to $10 million from the personal investment accounts of clients including Courte-ney Cox Arquette, Lauren Holly and Matt Damon, will face sentencing in federal court in New York City. Under the terms of a plea agreement with prosecutors, Giacchetto could face almost five years in prison.
For three years starting in 1997, Giacchetto confessed, he drew checks in his clients' names, deposited them into the operating account for his investment firm, the Cassandra Group, and used the money to cover, among other things, his own considerable expenses. By reimbursing one client with funds stolen from another, he constructed a web of fraud that the Securities and Exchange Commission is still working to unravel. For example, regulators say, he took $250,000 of Ben Stiller's money, which he may have used to purchase art. Months later he reimbursed the actor's account with money that seems to have come from a retirement fund for the band Phish. "We thought the discrepancies were just sloppy bookkeeping," says a former employee. "As it turns out, though, he was a thief, plain and simple."
Arrested last April and released on $1 million bond, Giacchetto tried to flee a week later but was apprehended at Newark airport with a doctored passport, 80 plane tickets and $4,000 in small bills. "What I built became so big and I became so overwhelmed that I lost control," he tearfully told the court in August after pleading guilty. "I pray and hope that we will make reparations...and I mean that from my heart."
Few were more shocked by Giacchetto's demise than the very people he burned. Garrulous, sophisticated and well-versed in art, fashion and music, he won not only the trust of his clients but their friendship too. "He could talk about cubism and venture capital," says acclaimed New York City painter Robert Gin-der, who hired him to manage his finances in 1992. "He was a weird combination of slick and goofy, and that somehow made him seem very sweet and charming."
What's more, he knew money. In the mid-1990s Giacchetto made a name for himself by brokering the $20 million sale of Nirvana's old record label Sub Pop to Warner Music and, in 1998, attracted $500 million in venture capital from the Chase Manhattan group. His clients liked the results. "I remember being at a party," says a former business associate, "and listening to Matt Damon and Ben Affleck laughing about how much money Dana was making for them."
No one is laughing now—not even at Giacchetto's expense. "He started out with good intentions," says photographer Patrick McMullan, a regular at the money manager's star-studded soirees. "He just forgot who he was."
The older son of Cosmo Giacchetto, 72, and his wife, Alma, 73, both real estate agents, Giacchetto was raised in the Boston suburb of Medford, where he displayed an early knack for business by selling magazines door-to-door for pocket money at age 11. As a teenager he fronted a couple of bands and set his sights on being a rock star but never quite made it. After briefly attending the University of Massachusetts and dropping out (he completed his B.A. in English years later) he settled for a job as a financial analyst at the now defunct Boston Safe and Deposit Company.
In 1987 Giacchetto struck out on his own as an investment specialist for artists and performers—a breed that, as a musician, he felt he understood. (Stockbroking, he told New York magazine in February, "is an art, just like writing a song or doing a painting.") Successful in Boston, he set up shop in Manhattan in 1991 and quickly won over Marc Glimcher, president of New York City's influential Pace Wildenstein Gallery, who introduced him to the cream of the Manhattan art world.
From there he networked his way to Hollywood. Glimcher introduced him to Hollywood talent agent Jay Moloney, who introduced him to su-peragent Michael Ovitz and talent manager Rick Yorn. They recommended him to their hot young clients (Diaz, DiCaprio), and he wooed them with good times. When his building's co-op board complained, he shifted his parties to clubs like Veruka, where he "would spend $10,000 a night," says owner Ashman, "two or three times a week." When the Smashing Pumpkins came to town he picked up their hotel tab. "If he wasn't visiting Courteney Cox Arquette at her home, she was at his place," says a former employee. "If he wasn't in Thailand on set with Leo DiCaprio, Leo would be catching a few zzz's in the apartment." The effect was contagious. "You think, 'If Leo is hanging out with this guy and giving him his money, why shouldn't I?' " says Victoria Leacock, a New York City documentary filmmaker who trusted Giacchetto with much of her life's savings.
Not everyone was won over. Before joining up with Giacchetto, movie producer Bill Robinson consulted his business partner, actress Diane Keaton. "Diane warned me against him," recalls Robinson, who nonetheless ignored her advice. "She said, 'Hollywood and money managers don't mix.' " In time he came to agree. Investment statements from Giacchetto were a rarity. Requested checks were always "in the mail." By the fall of 1999 Giacchetto seemed to have checked out. "I remember going up to him at a party and asking if we could go over some investments," says Robinson, "but all he would talk about was his last trip to Cuba with Alanis Morissette."
In one week of December 1999, spooked by rumors of risky and even illegal investments, 17 high-profile clients pulled out of Giacchetto's fund, drawing the attention of the SEC. Artist Ginder was among the first to receive a call. "This investigator asks me if I had authorized anyone to sign and cash two checks from my account totaling about $196,000," he recalls. "It was like the bottom fell out of the elevator. Two nights later I see Dana on Hard Copy being led away."
Even then some refused to believe their friend's guilt. "After the first time he was arrested," marvels filmmaker Leacock, "I actually bought a cupcake for him." Slowly, though, the truth has sunk in. As of late October SEC officials had not yet determined exactly how much money was lost and how much might be recovered. Regardless, says one Hollywood heavyweight, "it was never about the money. It was about trust. This has been an incredibly painful chapter in a lot of our lives, and it is far from over."
Steve Erwin and Joseph V. Tirella in New York City