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.

Split: Raffaello Follieri with former girlfriend actress Anne Hathaway. The Italian businessman has been arrested on fraud and money laundering charges

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.