Fashion Faux Pas

On December 17, the night before they left for vacation in Switzerland, Fashion Cafe founder Tommaso Buti and his Czech supermodel wife, Daniela Pestova, threw a “low-key” Christmas party at their palatial Olympic Tower penthouse. There was a simple buffet dinner for 50, and Pestova, attired in gray cashmere and a diamond necklace, didn’t even bother to put on her shoes. While their toddler son, Yanick, padded about, babbling to guests, Buti and his wife radiated joy, adding even more light to a home graced with floor-to-ceiling windows and dazzling views. To the many modeling agents and models in attendance – Veronica Webb and Yasmeen Ghauri among them – there seemed an obvious reason for the couple’s unabashed bliss: Early in the week, Donald Trump had announced he was opening a modeling superagency with Buti at the helm. Indeed, the evening’s high point came when the bushy-browed real-estate mogul summoned his new business partner – and Daniela, the firm’s putative first supermodel client – to his side for a champagne toast. “To the richest agency,” declared the Donald before imbibing.

What none of the guests knew was that the couple had another, far more complicated reason for revelry. The previous day, without any fanfare, the 32-year-old entrepreneur had finalized a very different kind of deal: paying $350,000 to the Fashion Cafe to settle $15 million in lawsuits his partners had filed against him earlier in the year. Though the press has portrayed Buti as a savvy restaurant impresario who severed his ties with Fashion Cafe in 1997, while “the getting was good,” the truth is less flattering. In fact, Buti resigned from management of the chain fronted by Naomi Campbell, Claudia Schiffer, and Elle MacPherson last summer, long after the company had descended into a financial quagmire, and only then once his partners were after him.

In late 1997, Luigi Palma, a Miami ophthalmologist who met Buti while vacationing in Monaco a decade ago, slapped his best friend with a $1 million suit alleging that Buti had illegally siphoned Fashion Cafe’s assets to finance a lavish lifestyle that includes “an expensive apartment, a car collection, private jets and extravagant entertainment.” The following summer, three corporate entities controlled by Valerio Morabito, the twentysomething heir to an Italian construction fortune, sued Buti for $14 million, claiming that Morabito’s erstwhile New York nightlife mentor had diverted company funds and lied repeatedly to prolong the illusion that Fashion Cafe was a success. Both partners demanded that a receiver be appointed to wrest the business from Buti’s control.

While the suits were pending in court, the battle spilled over into the papers. In August, the New York Post reported that Buti was resigning from Fashion Cafe management because he had sold his shares to a Mexican company and “felt it was time to move on.” By September, the story had changed dramatically: With the company in crisis, Buti had simply “disappeared.” “If Buti doesn’t show up, he’s in a lot of trouble,” Palma told the Sunday Times of London. Buti retaliated by suing the paper; the Times printed a retraction, acknowledging he had never vanished.

Tommaso Buti doesn’t look like the type who would find himself married to a supermodel. With short dark hair and clear olive skin, he is handsome but not exceedingly so. He claims to be five-foot-ten but appears at least an inch or two shorter. In fact, seated behind an enormous desk in his sprawling Murray Hill headquarters – which once housed Andy Warhol’s Factory – the diminutive Buti might easily be mistaken for the boss’s son. Buti says he never reads books and can recall only two he has completed: Pinocchio and Den of Thieves. Indeed, it seems fitting that both his boyhood-fantasy marriage and the financial scandal that has engulfed him are dissolving simultaneously. Just two weeks ago – a month after the Fashion Cafe settlement was completed – Buti announced on “Page Six” that he and Pestova are separating. The fate of his modeling agency remains uncertain.

Trump defends his new partner, saying it was he who proposed that they team up to start the agency, Trump Management Group. “I’ve made $5 billion because I bank on the right people,” Trump says. “And I think he’s a terrific, unjustly accused guy. Restaurants, with all the unions and hamburgers you got to deal with, are not for him. But Tommaso loves women and women love him back. He’s a natural to run a modeling agency.”

According to the personal history he served up in interviews, which were often accompanied by photographs of him posed on the hood of his canary-yellow Rolls Royce, Buti came to the U.S. from Florence “in search of a fresh start” after a disagreement with his wealthy father, for whom he had been working. In reality, he left Italy after bouncing 51 checks and promissory notes, having never worked at all. When I confront Buti with this information, he responds blithely. “I think everybody can have a financial problem,” he tells me. “We’re talking about $30,000 to $40,000. We’re not talking about $3 million. You know this, no?” Buti claims that the bulk of the bad money was promissory notes he wrote for the purchase of a BMW – notes he deliberately did not make good on when he realized the seller was a fraud. What the rest of the notes and checks were for – all of which he says have since been paid off – well, he can’t remember. “I swear I have no idea,” he says, laughing. “Is it that big of a deal when you are 22 years old?”

Notwithstanding the embarrassment back home, Buti insists he comes from an affluent background, and peppers his conversation with richly textured details of his pedigree. To hear him tell it, the Buti family was one of the first “pioneers” of Sardinia but sold their home there when posh Porto Rotondo “became commercial.” But those with firsthand knowledge of Buti’s upbringing insist that his family fortune is a mirage.

“Tommaso Buti is not from a wealthy family,” says someone who has done extensive research into Buti’s finances. A former associate is more blunt: “When Buti came here, he didn’t have two pennies to rub together.” The youngest son of an Italian family that a former close friend describes as “upper-middle-class at best” – his mother owned a clothing company; his father manufactured bottle caps – Buti attended school in Florence and was, by his own account, a very poor student. “I am a two-plus-two kind of guy,” he says. After repeating his final year twice, Buti graduated high school at 21, and did not continue his studies.

In 1989, he moved to New York and immediately began refashioning himself as a wealthy playboy. He moved into a Fifth Avenue apartment owned by the Caltagirone family, which is quite prominent in Italian real estate (“bigger than Trump!” boasts Buti); at the time, he was dating one of their daughters. With introductions from his wealthy girlfriend, Buti began hanging out with the Italian-expat jet set, befriending people like Luca Orlandi (scion of one of Italy’s largest fabric manufacturers and ex-boyfriend of Naomi Campbell) and Stefano Chitis (heir to a Naples-based global construction firm called Fondedile). “It’s not like Buti hung out with these people in prep school,” quips a former close friend. Along the way, he also befriended Kevin Costner, who often accompanies Buti to local nightclubs.

Inevitably, Buti soon amassed a personal posse of models, going to dinner with “the girls” in groups and making a name for himself on the scene. Wisely, he also parlayed his jet-set pals into something he could bank on. In 1990, Buti enlisted Ippolito Etro, scion of the leather-goods family, as a partner in his first venture, a focaccia-sandwich delivery service operated out of a converted office at World Wide Plaza. In 1992, Buti sold his stake to his partners in order to start his own “business on Wall Street” – a Fulton Street deli he immediately began promoting as an enormous success. Trade newspapers reported that his deli sold 1,000 lunches daily and was worth “an estimated $10 million.” When I remind Buti of this, he laughs. “It’s an article,” he tells me. “It doesn’t mean anything.” As for how much profit the deli made, the deal-maker has no idea and suggests I ask his former accountant. “His name was Greg,” he says. “Last name I don’t know.”

With the financial support of his friend Orlandi, Buti quickly graduated to an Italian restaurant in South Beach and an increasingly flamboyant life. Suddenly he had luxury cars – the Rolls, a Bentley, a Porsche, a Ferrari – and high-end real estate: At 26, he bought a $1 million five-bedroom house on Sunset Island in Miami. A short time later, his older brother, Francesco, bought a $450,000 condo nearby and joined him in business.

Shortly after establishing his luxury beachhead in Miami, Buti met the stunning Pestova, who, like him, had only recently arrived in America. After being discovered in a Prague movie theater in 1989, Pestova came to New York not understanding a word of English but became successful almost overnight. “She worked with all the best photographers, magazines, and beauty campaigns,” recalls her former agent Maria Cognata. “This was years before Tommaso.”

Unlike Buti, Pestova is universally well liked. “She’s an amazing, amazing girl,” says Cognata. “Extremely generous.” A former Fashion Cafe executive, no fan of Tommaso’s, has only nice things to say about his wife. “She’s beautiful and very polite and kind of shy in a way. Amazing, really – a very nice woman.”

Although Pestova rebuffed him at first, Buti pursued his cover model with a passion, giving her frequent gifts of extravagant jewelry, greeting her at airports with roses, and even following her on her travels. In the end, Pestova succumbed to his charms, and by all accounts fell madly in love. She and Buti were married at City Hall in April 1994, and then again the following summer, on Cap Ferrat, in a lavish wedding at the Hotel du Cap with 200 guests. For Buti, so eager to prove his mettle as a world-class playboy, Pestova was the ultimate status symbol.

Buti simultaneously packaged himself as both a product of great wealth and a “self-made” man, one who had transformed a $2,000 investment in a sandwich business into a Fulton Street gourmet store that he sold for a fortune. In truth, he sold the deli – which cost him $120,000 to open – for only $60,000. As for his house, he bought it with money from his mother and a wealthy man Buti describes as a “family friend.” His cars, he admits, were all leased. Hype, high living, and sub-ordinary investment returns. It was not an auspicious prehistory for Fashion Cafe.

Still, despite his youth and lack of experience, Buti had little trouble putting together what would become his biggest venture yet: The idea was to take advantage of the supermodel craze by assembling a chain of high-fashion diners. When he approached the supermodels with the concept in 1994, theme restaurants were booming, and Buti was offering an enticing package: $50,000 to $100,000 per appearance plus luxury travel and lodging and a percentage of net earnings as the business expanded. Through Chitis, who is good friends with Elle MacPherson, Buti met the model and sold her on the project; with Elle on board, he approached Claudia Schiffer, via her lawyers, and got her to join as well; once he had those two, Naomi Campbell fell dominolike into place. (Despite deriding Fashion Cafe as a “tacky theme restaurant for tourists,” Christy Turlington signed on in the summer of 1995. Two years later, after making far fewer appearances than her peers, she resigned.)

With “the girls” as enticement, it was an even easier feat to raise the money to foot their bills and open the business. The supermodels were then at the height of their power, and there were more than a few Italians on the fringe of Buti’s orbit willing to throw millions his way for a chance to meet and greet them. “The investors were ‘Tell me where to go’ kind of guys,” says a former Fashion Cafe employee who joined when the New York restaurant opened in the spring of 1995. “They wanted to say they owned the models. They wanted to say they owned a piece of Fashion Cafe. This was play money.” According to the source who researched Buti’s finances, Buti was not only a fabulous party-giver but also a shrewd one. “A wonderful car, a wonderful bottle of wine, whatever your vice might be, you just got carried along by the glamour,” he says. “Would he have succeeded selling copy machines or computers? I have no idea.”

Although the New York restaurant certainly had its fifteen minutes – its star-studded opening was captured by CNN and the BBC; Ruth Reichl waited on line for an hour, declaring the food “surprisingly decent” – it was soon attracting a clientele in which extras from Paper Dolls mingled with regulars from T.G.I. Friday’s. Indeed, it’s hard to imagine how a restaurant offering such attractions as a hermetically sealed display case of Pestova’s turquoise Victoria’s Secret underwear and oil-oozing fish might have garnered any glamorous repeat traffic – or any repeaters at all. The regularly scheduled fashion shows featuring “undiscovered models” parading around in “pajama fashions” didn’t help.

Between the time Buti began fund-raising in 1994 and his resignation from the business last summer, he raised a total of approximately $30 million, an exorbitant amount for a group of entities that owned only three restaurants, in New York, London (in receivership), and New Orleans (closed), and opened only four franchises, in Barcelona (closed), Jakarta, Manila, and Mexico City. That sum seems even more staggering when you consider where it did not go. “It was not in the operational budget,” says a former executive, who recalled how staff paychecks often bounced. “We were forever struggling – to be able to hire good people, to pay for our resources, even to keep up our business-magazine subscriptions. We had suppliers who would not deliver unless we paid cash.”

“Buti ended up selling like 400 percent of the business, and that’s how he got into trouble,” says a former associate. “Everything’s fine if the deal bombs right away, because none of the investors ask for their money back. But if it works for a while, then people start showing up and asking to see the books.” In less than three years of existence, the restaurant was sued repeatedly. Plaintiffs include such heavyweights as Rockefeller Center, which sued for six months of back rent and utilities, and the law firm Pavia & Harcourt, which sued for $400,000 in unpaid bills.

Records excerpted in the suits brought by Buti’s partners state that in 1996, Fashion Cafe made “payments and/or loans” of $670,000 to an entity called Francesco Tommaso Ventures and “payments and/or loans” to Daniela Pestova of $480,000. According to one suit, in 1996 the company paid Buti $260,000; in 1997 it paid him $305,000 and, mysteriously, threw in an additional $85,000 to his Miami restaurant, Mezzaluna. That same year, an entity called Daniela Pestova Entertainment received “payments and/or loans” of $700,000.

Valerio Morabito’s records show that his corporations wired more than $3 million of their $9 million investment in the Fashion Cafe entities into non-Fashion Cafe bank accounts in Zurich and Lugano – transfers the suit alleges were made “at the Butis’ explicit direction.” According to a sworn affidavit by another former partner’s accountant, Buti also ran up millions in expenses.

Although the Fashion Cafe partnership agreement entitled Buti to $250,000 in annual income and .05 percent of the annual gross profits of the company (in 1996, this percentage amounted to only $3,000), he spent $57,000 of the company’s money on two leased Mercedeses so that he and his brother could be squired around town in style (both had drivers, also on the company dole), $43,000 on garage bills, and $132,000 on cellular-phone bills. According to the affidavit, Buti also received more than $1 million in repayment for alleged advances to the company, including tens of thousands of dollars in “petty cash” expenses.

Buti insists he is being unfairly tarred. His lawyer Judd Burstein describes his client as an “easy target” and argues that – appearances to the contrary – the evidence against Buti doesn’t amount to much. “What you have,” he tells me, “is a one-sided account with documents taken out of context and trumpeted as the gospel, when the whole story is very different.” According to Burstein, that story’s protagonist is a generous, high-living if naïve foreigner who had no financial background but ultimately only his investors’ best interests at heart. “He was not versed in the formalities of American business law,” insists Burstein.

“I think it’s fair to say that in his mind, moving moneys through various corporate accounts to meet cash-flow needs was not improper. And I think from a moral perspective it wasn’t, because there was no intent to defraud or do anything other than save the company.” As for the $700,000 of “payments and/or loans” made to DP Entertainment in 1997, Burstein says: “Tommaso’s wife was committed to helping her husband, and so at a later time when there was cash available, the moneys were repaid.”

From our very first meeting, before we delve into the complex issues at the heart of his partners’ lawsuits, it is clear that Buti has cast himself as the victim in the Fashion Cafe saga. “It is unbelievable what happened to me,” he tells me one afternoon as we sit in a cab stuck in midtown traffic. “Everybody thought I had $200 million and they know I don’t like lawsuits, so they think they can line up and I will buy them out.” As for the accusations against him, Buti insists they are all false. “I never took anything from the company,” he says. “I gonna keep saying that for the rest of my life.”

Buti claims he knows little about Fashion Cafe’s finances – he did what his lawyers and employees told him to do and signed what they told him to sign. Asked why Valerio Morabito’s corporation wired $3 million of its Fashion Cafe investment into Swiss bank accounts when, by Buti’s own admission, all of the company’s accounts are located in the U.S., Buti pleads ignorance. “I know zero,” he assures me. As for why he set up so many corporate entities that appear to have done nothing other than receive and transfer money from Fashion Cafe-related companies, well, he simply has no idea. Buti does concede that he owns DP Entertainment, but claims the firm “represents” Pestova and was the financial entity to which he repaid his wife’s loans to the Fashion Cafe. Beyond this, Buti takes a pass on nearly all my specific financial questions and suggests I pose them to his brother and Andy Genett, the Fashion Cafe controller, instead. “Ask my brother. Ask Andy,” he says at least a dozen times in what becomes an irritating, Chekhov-like refrain. “We wasting time, spinning wheels.”

By phone, Genett assures me that when we meet face-to-face with the restaurant’s records before us, he will be able to explain Buti’s transactions. But on the day we are to meet, Genett informs me that Palma’s lawyers have forbidden him to show me the books and ordered him not to speak to me at all. The company’s lawyers, I later find out, are not convinced of the veracity of the records, most of which were created after Buti hired Genett – the company’s first controller – at the end of 1996. When I inform Buti of the stonewalling, he is alternately enraged and woeful. He claims he might refuse to let the settlement with his partners go forward if Fashion Cafe does not show me the books, but it is a threat he never makes good on. Then there is a new lament: “I wish I knew if I had a copy of all these things,” he tells me, but alas, he does not.

The week after New Year’s, I meet Buti, Pestova, and their son, Yanick, for lunch at Nobu. They have recently returned from skiing in Switzerland with Stephanie Seymour. Pestova talks to me and tends to Yanick; Yanick happily plays with his chopsticks. Tense and uncharacteristically tight-lipped, Buti frequently leaves the table to take calls on his cell phone, while Pestova talks warmly of her husband. “I trust Tommaso,” she tells me earnestly, over green-tea ice cream. “He’s one of the smartest people I know.” While she acknowledges that the problems with Fashion Cafe made 1998 a bit difficult, she places none of the blame for that on her husband, whom she portrays as a martyr. “It’s hard to see someone you love so much suffering or going through injustice,” she says in lilting English.

Pestova reports she simply laughed when she found out she was a defendant in one of the lawsuits filed by the Fashion Cafe partners. “They had nothing against me, obviously,” she says. “There were so many false accusations and so many lies.” As we put on our coats to leave, I ask her about the loans she was involved with. “What loans?” she asks, seeming genuinely surprised. “I didn’t know about that,” she says. “It’s interesting you say that.”

Just a week later, the couple announce they are separating. Some insist that Pestova had finally had enough of Buti’s rumored affair with another supermodel. Though Buti won’t confirm or deny reports of the affair, a close friend of his insists that they are true. In the wake of their separation, it is still uncertain whether Pestova will join her husband’s new agency, though some say Buti’s pressure on her to leave the relative security of Elite may have hastened the split.

Though he declines to name names, Trump insists the venture is already a success. “We got all these big girls lining up to join,” he says, promising major defections from top agencies in coming weeks.

The Fashion Cafe hasn’t fared quite as well. Last week, the restaurant’s gaudy banquettes were carted on to the sidewalk outside Rockefeller Center and hauled into a moving van. The restaurant is now under new management. Giuseppe Cipriani and Buti’s old jet-set friend Stefano Chitis have taken over, with plans to upgrade the food, inject cash into the business, and reopen in Grand Central Terminal this spring.

Buti tells me he will be happy if his fellow Italians succeed. “I still created it,” says the head of Trump Management Group. “I’m not a jealous person. I hope everyone’s going to make a fortune with Fashion Cafe.”

Fashion Faux Pas