Ex-Studio Owner Parretti Arrested on Fraud Warrant
Giancarlo Parretti, the former owner of the Metro-Goldwyn-Mayer film studio who vanished from Hollywood four years ago amid allegations of fraud, proved Wednesday that he can get arrested in this town.
Federal authorities surprised the Italian financier during a deposition in a Downtown Los Angeles law office, arresting him on a criminal warrant issued in France in May accusing him of fraud in connection with his ill-fated $1.3-billion purchase of MGM using loans from the French-owned bank Credit Lyonnais.
Following Parretti’s arrest, the U.S. Attorney’s office moved for an order holding Parretti without bail pending extradition to France. The motion will be considered by a federal judge on Friday.
Parretti’s lawyer, Jay Coggan, immediately criticized the arrest, calling it a ploy by the French to force Parretti to settle a $3.9-billion civil lawsuit Parretti filed against Credit Lyonnais. Coggan also criticized U.S. officials for getting involved in the business dispute, saying that they are effectively acting as “bill collectors” on behalf of the French government.
Credit Lyonnais lawyer Richard J. Holwell countered: “The reality is he’s been indicted in France, and he’s got to face the music. These are serious charges.”
Parretti is wanted in France on allegations he misused company assets and of forgery, embezzlement and perjury. Papers filed by federal prosecutors Wednesday also show that Parretti remains the subject of an extensive FBI and Internal Revenue Service investigation alleging that he obtained funds from Credit Lyonnais fraudulently, and that he looted his former MGM/Pathe company, including transferring $22 million to an Italian company he controlled.
In arguing to deny bail for Parretti, who turns 54 on Monday, federal authorities listed an extensive Italian criminal history dating back to the mid-1970s that resulted in fines, and even imprisonment. They include charges for issuing bad checks, fraud, conspiracy to commit bodily harm, embezzlement, fraudulent bankruptcy and tax fraud.
Despite his criminal past, Parretti burst onto the Hollywood scene in 1990 in what remains one of the town’s most bizarre and colorful business episodes. Parretti was crowned “the new king of Hollywood” by Robin Leach in a glowing two-part segment of “Lifestyles of the Rich and Famous,” and was able to get audiences with some of Hollywood’s most powerful figures. But shortly after he bought MGM, Credit Lyonnais repossessed the studio after Parretti defaulted on his loans.
Shortly before noon Wednesday, Parretti, who was at the law offices of White & Case with his daughter, Valentina, was led away in handcuffs. Two federal marshals, along with agents from the FBI and Internal Revenue Service, showed up at the office and lawyers involved in the deposition said the arrest came without any warning. Parretti was in the third day of the deposition, and had been expected to continue for another week or so.
The chain of events leading to Parretti’s arrest started last week when he unexpectedly traveled to the United States to face charges of perjury and evidence tampering in a Delaware lawsuit he was embroiled in with Credit Lyonnais. Parretti was released on $100,000 bail and traveled to Los Angeles for a deposition in his civil lawsuit against the bank that had been originally scheduled for Rome. Lawyers at White & Case, where Holwell works, notified federal authorities.
“To our amazement, he decided to travel to Los Angeles. It was a blunder on his part,” Holwell said.
Coggan said that Parretti traveled to the United States to clear his name in the Delaware case, and to press his civil lawsuit against Credit Lyonnais, which in turn is suing Parretti.
He said Parretti plans to fight the extradition. “In his mind, he is right and has done nothing wrong,” Coggan said.