NEW YORK (Reuters) - An Italian businessman famed as the long-time boyfriend of actress Anne Hathaway was arrested on Tuesday on charges of operating a fraudulent real estate scheme that he claimed was linked to the Vatican, U.S. authorities said.

Raffaello Follieri, 29, a globe-trotting multimillionaire living in New York, was charged with conspiracy, wire fraud and money laundering in a criminal complaint unsealed on Tuesday in U.S. District Court in Manhattan.

He appeared in court on Tuesday and was ordered released on an extensive $21 million bail package that included confiscating his passport and restricting his travel to within Manhattan. He did not enter a plea.

Follieri is accused of operating a scheme between 2005 and 2007 in which he led investors to believe that he had close connections with the Vatican that enabled him to buy the Catholic Church's unwanted U.S. real estate properties at a discount, according to U.S. prosecutors.

Follieri and others used the investors' money for expensive clothes and restaurant meals, a $37,000-a-month Manhattan apartment, dog-walking services and other personal expenditures including medical expenses, exotic vacations and privately chartered flights for his girlfriend at the time, according to the complaint. Authorities did not identify the girlfriend.

For the past four years, Follieri had dated Hathaway, who starred in movies "The Devil Wears Prada" and "Get Smart," which was released in the United States last week. The couple were widely reported to have split recently.

A representative of Hathaway did not respond to calls and e-mail seeking comment.

In court, Follieri, dressed casually in jeans, a white shirt and blue pullover, reacted heatedly to U.S. prosecutor Reed Brodsky's arguments he was a flight risk with at least 10 million Euros (about $16 million) in one of several overseas bank accounts, as well as debts of more than $3 million, and had tested positive for opiates.

Follieri often interrupted his lawyer during the hearing, speaking loudly and mugging for the audience, while claiming to have paid off some of the debts prosecutors said he owed.

"He obtained millions of dollars from investors and then he used that money to live the lifestyle of a multimillionaire," Brodsky said. "In short, Your Honor, he was a con-man."

But his lawyer, Flora Edwards, said there was nothing to suggest Follieri would flee even though his family lives in Italy. "This is a young man who has no criminal history," she said.

Follieri, of Foggia, Italy, had made false representations that included claims that the Vatican formally appointed him to manage its financial affairs and that he met with the Pope when he visited Rome, prosecutors said.

In reality, according to the complaint, Follieri did not have any connections that allowed him to buy Church real estate at below-market rates.

The complaint cites witnesses who said Follieri kept various ceremonial robes at his office in New York, including those of senior clergymen. In one instance, Follieri asked a monsignor who was traveling with him to change out of his robes "and put on the robe of a more senior clergyman in order to create the false impression that Follieri had close ties to the Vatican," the complaint said.

Follieri got millions of dollars in investment money from an unspecified private equity firm based on his misrepresentations, court papers said.

According to published reports, California supermarket mogul Ron Burkle has previously sued Follieri in Delaware for misusing money from a joint real estate venture involving buying and reselling properties owned by the Catholic Church.

If convicted, Follieri could face as much as 20 years in prison for wire fraud, but prosecutors said if he pleaded guilty to the charges he could receive up to six and half years prison.

Source: Reuters