Financial adviser to the stars charged

Tuesday, April 4th 2000, 12:00 am

By: News On 6

NEW YORK (AP) -- An investment adviser whose clients included actors Leonardo DiCaprio, Matt Damon, Ben Affleck and singer Alanis Morrisette has been charged with stealing millions to support a lavish lifestyle.

Dana C. Giacchetto, a 37-year-old New Yorker, allegedly diverted $20 million from clients and pocketed more than $6 million illegally. Also among his alleged victims were members of the popular alternative rock band Phish.

Giacchetto is also accused of failing to return at least $4 million in money maneuvered through the accounts in his investment business, The Cassandra Group.

Federal prosecutors brought criminal securities charges against Giacchetto in U.S. District Court in Manhattan while the Securities and Exchange Commission charged him in a civil lawsuit and obtained a freeze of his assets.

In court papers unsealed Monday, prosecutors and the SEC said Giacchetto stole from clients to pay for his apartment, hotels, travel, dining and entertainment. The SEC accused him of issuing fake portfolio statements or other false documents to clients who wanted proof of their purchases.

For at least the last three years, he "sought to attract clients from the arts and entertainment industry, many of whom lacked financial sophistication," the SEC said.

U.S. Attorney Mary Jo White said the case demonstrated that "no one is immune from any kind of scheme, securities or otherwise."

Giacchetto's lawyer, Andrew Levander, told Judge Lawrence McKenna on Monday that his client was returning from a trip abroad. Outside court, Levander said he couldn't comment further because he had not yet had a chance to read the court papers or talk to his client.

He said his client was expected back in New York today and that Giacchetto sent a letter to his customers a week ago telling them he was getting out of the investment business.

Federal prosecutors charged Giacchetto with securities fraud, fraud and making false statements to the SEC. According to court papers, Giacchetto signed an affidavit in December admitting that he misappropriated $3.9 million from Phish and its members and another $968,900 from accounts held by the band's manager.

If convicted, Giacchetto faces a maximum of 10 years in prison on the most serious charge and $1 million or twice the gross gain or loss resulting from the crime.