Scammer to the stars: Paying dearly for disappointing returns

Dana Giacchetto was born for the boom times of the late 1990s. Fast talking, with a smooth and comforting style, he ingratiated himself with the rich and famous as someone who knew the business of investing and could handle the unique demands of movie stars, entertainment executives and rising rock stars. Leonardo DiCaprio, Tobey Maguire, Cameron Diaz, superagent Michael Ovitz and magician David Blaine, among others, trusted Giacchetto to handle their millions and mingled with guests at the lavish soirees he threw for them in his Soho loft. Hopefully they enjoyed the champagne, since they paid for it more dearly than they likely imagined at the time.

As it turned out, Giacchetto's financial "management" was more along the lines of Charles Ponzi than Warren Buffett. Arrested in 2000, he was ultimately convicted of a variety of financial improprieties. His clients, almost to the person, lost everything they had invested with him.

In "You Will Make Money In Your Sleep: The Story of Dana Giacchetto, Financial Adviser to the Stars" (Scribner, 300 pp., $25), Seattle author Emily White recounts Giacchetto's career, from his suburban Boston upbringing to rubbing elbows with the stars in New York, Hollywood and Grunge-fueled Seattle. White, as it turns out, knew Giacchetto personally — she and her husband lost $80,000 investing in Giachetto's moneymaking schemes.

It should be an interesting story of greed and curiously naive movie stars... and, in some ways, it is. Giacchetto set up shop in 1988 when he was just 28, financed almost entirely by his parents' life savings. His company, dubbed the Cassandra Group, pitched itself as a financial adviser to the "arts community." Giacchetto worked gallery openings and called punk-rock labels he admired, gathering clients rapidly with his self-assured style. He opened branch offices in Soho and Los Angeles.

From his Soho loft, Giacchetto ultimately signed up Sub Pop, the Northwest record label most famous for finding and recording Nirvana in its early days before Geffen Records bought them out. Giacchetto offered the young Sub Pop managers financial guidance and, with little experience or research, they trusted him, including White and her husband, president of Sub Pop. Giacchetto ultimately helped negotiate the sale of Sub Pop to Time-Warner for $20 million, which only added to his broader cachet.

The entire scheme began to unwind as the FBI opened an investigation into the Cassandra Group's abysmal financial records. Giacchetto's movie-star friends vanished overnight. Giacchetto was ultimately convicted of a variety of criminal charges, including fraud and lying to the SEC, and sentenced to a long prison sentence by a judge not terribly impressed by his charitable activities. Giving away other people's money apparently didn't count for much in the court's sentencing calculus.

Although at times an entertaining window into the lives of Hollywood stars and their foibles, the book unfortunately struggles on several fronts. For starters, it annoyingly veers between present and past tense, presumably an effort to add both immediacy and perspective to the tale, but only at the cost of distraction and confusion.

White is, moreover, hardly an objective observer, as she herself was swindled by Giacchetto. That might make for an interesting perspective, but she was neither close enough to Giacchetto to provide much of a first-hand account of the fleecing nor distant enough to provide a reliably objective recounting of the scheme as, for example, James B. Stewart's Wall Street exposé "Den of Thieves" so rivetingly provided. Instead, she relies heavily on her own dealings with Giacchetto and her extensive interviews with his parents. Poised between memoir and biography, it fails the measure of either.

And that's a shame. With a cast of naive celebrities, a slick scam artist and pilfered millions, this could have been a remarkable story.