The jam-meisters in Phish appear to have been swindled out of close to $5 million by a Manhattan financial adviser, Dana Giacchetto, whom federal prosecutors believe bilked a total of $20 million from his celebrity clients and pocketed some $6 million of those funds.On Monday, attorneys in a U.S. District Court charged Giacchetto with three criminal counts of securities fraud, fraud and lying to the Securities and Exchange Commission. The SEC also filed a civil suit against the adviser, claiming that he had systematically siphoned off clients’ money to pay for his own personal expenses, according to “The New York Times.” Giacchetto’s roster of clients for his Cassandra Group included such names as Leonardo DiCaprio, Alanis Morissette, Ben Affleck, R.E.M.’s Michael Stipe, The Smashing Pumpkins’ James Iha, Matt Damon, Fred Schneider of the B-52’s, Cameron Diaz, and Ben Stiller, among others.
An article profiling Giacchetto and his powerful connections appeared
in the just-released April issue of “Vanity Fair.”
The only three clients the SEC specifically accused Giacchetto of legally defrauding in its civil suit were Phish, Matt Damon, and Ben Stiller. In December, Giacchetto allegedly signed an affidavit for federal prosecutors admitting that he had taken $3.9 million from Phish and another $969,000 from the band’s manager.
As part of the December settlement, Giacchetto paid back the band and its manager all of the money he was accused of misappropriating, and a publicist for Phish said that the group had no comment on the pending legal matter.
The criminal complaint didn’t identify any of the investors who were taken in by Giacchetto or his Cassandra Group, although the celebrities might turn up to testify against the adviser if and when the case goes to trial.Two weeks ago, Giacchetto notified his clients that he was getting out of the business of being a financial adviser, and a lawyer representing Giacchetto at Monday’s
hearing said that he was currently out of the country but was planning on returning. On Tuesday, Giacchetto surrendered to authorities in New York City and was eventually released on a $1 million bond after being formally charged in Manhattan federal court.
If convicted of all the pending charges, Giacchetto could face up to 10 years in prison and a $1 million fine.