HIGH FLYING MONEY MANAGER HITS THE GROUND

Money manager and investment advisor to A-list stars, Dana Giacchetto, was charged with three counts of illegally transferring $20 million and stealing $6 million of client's money on Monday (4/3). He is accused of securities fraud and lying to the Securities and Exchange Commission. If convicted, he could face up to 20 years in jail and fines of $1.5 million.

Giacchetto's asset management business, the Cassandra Group, founded in 1988, was a major investor in Digital Entertainment Network. Giacchetto's clients have included teen dreams Leonardo DiCaprio, Matt Damon, Ben Affleck, movers and shakers in New York City's artworld, Michael Ovitz and hipster rockers such as Phish [www.phish.com] . It is alleged that he deposited money from client's accounts into a Cassandra account and check-kited “investment” dividends to older clients using money from new clients. Can you say Ponzi? I knew you could.

Giacchetto's troubles started to gain attention at the end of last year. In November, the friend who helped him gain entrance into the glamorous life, Creative Artists Agent Jay Maloney, committed suicide after struggling with substance abuse problems. The following month Giacchetto was in the gossip pages as clients, including pals DiCaprio and Damon, began abandoning the high-profile manager, questioning some of his risky investments – including Paradise Music & Entertainment, whose chairman and CEO is Bob's son Jesse Dylan.

The big loser would appear to be Phish. The band's suspicions were raised when their accountant noticed withdrawals from their account. SEC papers show that Giacchetto promised to repay the group $4.7 million.

Giacchetto is expected to surrender to the FBI today. Phish is not expected to surrender without a fight. At least three Internet start-ups have said they're interested in hiring Dana as their head of finance.