The ex-boyfriend of Hollywood star Anne Hathaway has had his bail set at £10m after his arrest on fraud and money laundering charges.

Italian-born businessman Raffaello Follieri will be under house arrest, even if he manages to find the bail money.

Follieri, 29, was charged with six counts of  fraud and five counts of money laundering  yesterday.

The FBI also said Follieri ‘tested positive’ for opiates during a routine drug test.

Follieri is accused of lying to investors and falsely claiming he had been appointed as the chief financial officer of the Vatican.

He is said to have used illicit transactions to fund a lavish lifetsyle in New York.

Actress Hathaway, 25, dumped Follieri, 29, earlier this month, as exclusively reported by the Mail Online.

They had been together for four years.

A criminal court revealed Follieri is accused of operating a scheme in which he led investors to believe that he had close connections with the Vatican.

He claimed his connections enabled him to buy the Catholic Church’s unwanted U.S. real estate properties at a discount, according to federal prosecutors and the FBI.

Follieri and others allegdly used the investors’ money for expensive clothes and restaurant meals, a £20,000-a-month Manhattan apartment, dog-walking services and other personal expenditures.

He is also accused of using the allegedly swindled funds in question for a trip to the Dominican Republic at New Year, between 2005 and 2006 with his ‘then girlfriend’ and another couple.  The girlfriend has not been named.

He is also allegdly kept clergy robes in his office and once asked a monsignor to change into the uniform of a more senior clergyman in order to ‘beef up’ his alleged Vatican connections.

Follieri could face life behind bars if convicted, People magazine reported on its website.

He is due back in court on July 9 for a pre-trial hearing.

Once he is out of custody he will have to wear an electronic monitoring device and will only be allowed to leave his home for legal, medical and religious reasons.

He will only be allowed out on the island of Manhattan.

Follieri was recently under investigation by the New York State Attorney General’s office, which has no record of tax disclosure forms necessary for his charitable Follieri Foundation.

He was also arrested in April for allegedly writing a £107,000 bad cheque, but was cleared of that charge after he repaid the funds.

Anne Hathaway has opened up about her painful breakup from Raffaello Follieri – confessing she was in “shock” when she heard about his arrest.

The Devil Wears Prada star split from Follieri in June (08) shortly before he was arrested on suspicion of conspiracy, wire fraud, and money laundering in an alleged scam allowing him to purchase unwanted U.S. properties owned by the Catholic Church.

Hathaway tells W magazine, “As soon as I found out about the arrest, I had to get on a plane to Mexico to do a press tour for Get Smart. And then I spent a week in shock at a friend’s house… I just started to cry because I thought, I don’t have a life right now. And I haven’t for some time.”

And Hathaway insists it was her friends and castmates who have helped her get through the ordeal.

She adds: “It’s a situation where the rug was pulled out from under me all of a sudden. But just as suddenly, my friends threw another rug back under me.

“Steve Carell stepped up for me during an interview when someone asked a question about it. He said, ‘At some point you’re going to have to talk about this time in your life. You don’t have to do it this week. I’ll take care of anything that comes your way.’”

Follieri is currently being held in custody after failing post the $21million (GBP12 million) bail set by the judge.

He is reportedly in talks to reach a plea deal with prosecutors to end the case.

Moving on from jailed ex-boyfriend Raffaello Follieri, Anne Hathaway told PEOPLE she is crushing on a new mystery man.

“This guy I know in L.A. is kind of doing it for me right now,” the actress told PEOPLE at the London premiere for her newest movie, Rachel Getting Married. “When I think of sexy, I think of him.”

“You know when sometimes you don’t know someone very well – you’ll probably never see them again – but you just meet them and you’re like ‘WOW, you really have it going on’?”

But the actress cautions that things haven’t gotten serious yet. “I’m totally single right now,” says Hathaway, who wore a blue Zac Posen gown and Bulgari jewels to the premiere, which was part of the BFI 52nd London Film Festival. “But I happened to meet a sexy guy the other day.”

Hathaway’s due to spend time with another sexy guy – Johnny Depp – as filming starts for Tim Burton’s upcoming film, Alice in Wonderland, in which she plays the role of the White Queen.

Is she excited to work with Depp? “Uh, yeah, ya think?” Hathaway, 25, told PEOPLE. “I hope I don’t faint. I’m wearing a corset which is difficult enough, but then to have to wear a corset and be short-breathed around Johnny Depp?”

And her friends are buzzing with excitement at her upcoming costar. “I have so many people coming out of the woodwork who really have never wanted to visit me on the set before just want to kind of come and hang out,” she says. “Everyone just wants to meet Johnny.

“It might be my hardest role to date – to keep my cool.”

Meanwhile, Hathaway’s ex Follieri, who pleaded guilty last month to wire fraud, money laundering and conspiracy, is preparing for his Oct. 23 sentencing.

Prosecutors said Monday, the Associated Press reports, that they urged the judge not to show leniency after learning that Follieri sent the judge a photo of himself and the pope in hopes of reducing his prison sentence.

Follieri agreed to four-plus years in prison during his guilty plea but last week his lawyers requested a three-year sentence instead.