Raffaello Follieri was arrested Tuesday and charged with conspiracy, wire fraud and money laundering in an lleged real-estate investment scheme designed to fuel his lavish lifestyle, according to a Wall Street Journal report.

Last year, L.A. bilionaire and supermarket magnate Ron Burkle sued Follieri, the chief executive of Follieri Group, in Delaware Chancery Court for allegedly misappropriating $1.3 million from Burkle's Yucaipa Cos. private equity firm. Prosecutors in the U.S. Attorney's Office in Manhattan declined to say whether Yucaipa's civil complaint was the basis for the criminal charges.

According to the Journal, Follieri allegedly duped investors by saying he had close ties to the Vatican and could obtain properties owned by the Roman Catholic Church at below-market values for redevelopment.

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