Conman said company was worth millions ... but he only had $208 - Sydney Morning Herald

In court ... Dimitri De Angelis. Photo: Helen Nezdropa

A French-born former flight attendant who claimed to be in business with James Packer and Lachlan Murdoch conned several investors out of $8.5 million by pretending to be a well-connected music industry executive, a court has heard.

Dimitri De Angelis sent his victims doctored photographs of himself with the Dalai Lama, Nelson Mandela and former US presidents Bill Clinton and George W Bush, and boasted of cooking meals for former prime minister John Howard at Kirribilli House, to make it appear he was a wealthy and successful businessman.

In September, De Angelis pleaded guilty to 16 fraud charges after a District Court judge dismissed an application that he was unfit to stand trial due to a psychotic illness or narcissistic personality disorder.

"In business together" ... Lachlan Murdoch and Dimitri De Angelis. Photo: Supplied

De Angelis's victims included the former deputy lord mayor of Sydney, Marcelle Hoff, and her husband John, who lost $1.01 million; Anne Keating, the sister of the former prime minister, who lost $100,000, and Victorian barrister Graeme Uren QC, who lost $20,000.

De Angelis told them he was setting up a company called Emporium Music, which would rival music industry powerhouses Sony and Warner Music Group and guaranteed investors a "fool-proof agreement that would reap extraordinary financial rewards for them".

He said Lachlan Murdoch and James Packer had each contributed $20 or $30 million to the company.

Dimitri De Angelis, with actress Sophie Monk, pretended to be a music industry executive. Photo: Supplied

But in reality, Mr Packer and Mr Murdoch were not involved, and he frittered the money away on travel, beauty products, luxury cars, property and cash withdrawals, often using capital from one investor to repay loans from another.

In the Sydney District Court on Thursday, the Crown Prosecutor, Michael O'Brien, said De Angelis was taking money right up until his "house of cards" came tumbling down in June 2009.

At the time, he told investors Emporium was worth millions of dollar and was about to float on the Australian Stock Exchange, when in fact the company's bank account had just $208 in it.

Dimitri De Angelis and former Russian president Mikhail Gorbachev. Photo: Supplied

De Angelis's barrister, Soruban Sivalogananthan, said the victims did not conduct any due diligence or request corroborating documentation, and De Angelis got carried away, in a manner typical of people with a narcissistic personality disorder. Mr Sivalogananthan said De Angelis had no formal business training and he made a "genuine" but "misplaced" attempt to create a successful music company.

He came to Australia in 1991 after becoming involved in a relationship with an Australian man. His only business experience was a failed import/export rice company. Mr Sivalogananthan conceded his client faced a jail sentence.

Outside the court, De Angelis said he was scared of going to prison.

"I feel bad yes, yes I do, I feel sorry for what's happening, you know, I feel so sad, you know."

He said he had not apologised to the victims but would do so "through the court". The hearing continues.