Cameron and the swindler

Cameron Diaz has broken ranks with members of the Hollywood A-list in a bid to escape potentially embarrassing publicity from a huge financial swindle.

Diaz is the biggest name so far to bow to pressure from lawyers trying to recover millions lost by Dana Giacchetto, a celebrity money manager who paid off showbusiness clients with money stolen from his less famous investors.

She has agreed to return nearly £70,000 paid to her by Giacchetto, who hid cashflow problems from his rich and powerful friends by sending them "dividends" that were taken from money invested by his less well-heeled clients. The star was originally sued for twice as much. But Diaz says she wants to "avoid the expense of litigation," while denying "any wrong doing or liability".

"Broker to the Stars" Giacchetto, who was sent to prison three years ago on fraud charges, charmed stars including Spider Man Tobey Maguire, Ben Stiller, Courteney Cox and singer Alanis Morissette.

He entertained lavishly, partying with celebrities, including Leonardo DiCaprio, before persuading them to invest with him.

They were delighted at the return on their investments - without realising they were being given special treatment as Giacchetto's Cassandra Group plunged deeper into the red.

A lawsuit brought on behalf of Giacchetto's ordinary victims says the stars benefited to the tune of millions from what it calls "unjust enrichment''.

Other big names - who are being sued for much more - are still holding out. Top of the list is Maguire, who is being chased for around £220,000 and Cox with nearly £150,000.

Lawyers representing creditors of the now defunct Cassandra Group, are pushing for more than £1.5 million in settlements from the fund's celebrity clients.

Cassandra trustee Robert Geltzer, who is responsible for recovering the money, does not accuse the stars of wrong-doing but says a lack of intent is no defence against "fraudulent transfer".

Much of the money lost by Giacchetto, 40, was spent on helicopter rides, hotel bills and an art collection said to be worth millions. In the year before his arrest in April, 2000, he is said to have spent nearly £100,000 on hotel bills and £40,000 in restaurants. Afterwards, his lawyer claimed he had been abandoned by his celebrity friends, none of whom lost money.

Giacchetto was freed from prison earlier this year and is now staying in a half-way house until the end of this month before regaining his liberty. He is said to blame his downfall on drink and drugs.