Deal with the Devil

From New York Post

By JEANE MacINTOSH and KATI CORNELL

A New Jersey bishop who spent five years in Rome under Pope John Paul II sold his beach house to Raffaello Follieri last year, even as the accused con man's alleged scheme to steal millions of dollars from investors began to unravel.

Bishop Joseph Galante, a former undersecretary at the Vatican and current head of the Camden Diocese, pocketed $400,000 for his four-bedroom townhouse in North Wildwood, NJ, in the sale to Follieri in February 2007, The Post has learned.

Last week, the property changed hands again, as the now-jailed Follieri, scrambling to raise the $21 million necessary to free him on bail on federal fraud and money-laundering charges, resold the house for an unknown sum.

But Galante and Follieri had more in common than a beach getaway: Both were keenly interested in the sale of church property.

Follieri is accused of exaggerating his ties to the Vatican in a scheme to fool investors into thinking he had first dibs on buying shuttered properties.

The feds claim Follieri went so far as to pay two monsignors to accompany him on business trips and used his ill-gotten gains to fuel a jet-set lifestyle and lavish gifts on his then-girlfriend, actress Anne Hathaway.

Meanwhile, Galante has actively pushed a controversial plan to close half the churches and schools in the Camden Diocese since his arrival in 2004 and personally introduced Follieri to several parish priests, sources said.

Galante also controls the Atlantic City parish where one of the two priests referred to in the criminal complaint against Follieri, Monsignor William Hodge, is based.

Spokesman Andrew Walton said Galante initially met with Follieri at the encouragement of the Vatican and had no idea he was dealing with a con man until two months after he finalized the sale of his beach house.

Walton said the diocese "got a phone call from an office of the Vatican through the bishop's office and we were asked to be open to dealing with the Follieri Group. We and other dioceses were encouraged to use Follieri where we could."

He added that parishes own their own properties and any sale would benefit them, not the diocese.

"We were certainly open to hearing from Mr. Follieri. We were led to believe the group was legitimate," Walton said, adding that the diocese learned of Follieri's legal woes in May 2007 when he was sued by his former business partner, billionaire Ron Burkle.

The federal complaint unsealed at the time of Follieri's arrest June 24 closely mirrors the Burkle lawsuit, which accuses Follieri of using money from their joint venture to pay for personal extravagances.