Sex, Drugs and Paparazzi

The term "paparazzi" was coined in Italy to describe the wolf pack of photographers that stalks celebrities worldwide.

And now the rich and famous are squirming as Italian prosecutors peel back the onion on a paparazzi scandal called "vallettopoli" -- and it's a story filled with all the sex, drugs, fame and betrayal any tabloid reader could want.

At center stage is Fabrizio Corona, a tough-looking guy, sporting tattoos and "Men in Black"-style sunglasses. The owner of a well-known photo agency, Corona has been accused, together with talent scout Lele Mora, of blackmailing VIPs by threatening to publish compromising pictures.

Francesco Totti, Italian soccer icon, former Prime Minister Silvio Berlusconi's daughter Barbara, the current prime minister's spokesman, and many more TV and movie actors, football players and politicians are the subjects of sensational photographs in an archive of 1,600 CDs from the agency.

Corona denies any wrongdoing and portrays himself as a modern and selfish Robin Hood who steals from the rich and gives to himself. He explains he was only offering stars the chance to buy pictures and gossip at the same price he would charge the publications.

Investigators tapping Corona's phones overheard him tell his wife: "Yes it's true, I ruin lives, I am a piece of s*** and I don't even feel guilty anymore."

Corona and his colleague, among 12 arrested in the case, are accused of inviting wealthy and famous people to parties with drugs and starlets (the valletto) providing "favors." All this was recorded on film and the most sensational pictures were used as blackmail, according to prosecutors.

Corona puts it in another way: "For example, I convince a girl who wants to appear on the newspapers to go with some famous guy. This famous guy doesn't know someone will take a picture of him and he goes with her. What's the difference if he is aware or not that he would be taken photographed? He's been with her anyway," he explained in a televised interview.

Many Italians aren't sure if these activities are illegal or just bad behavior. Giovanni Iozzia, vice editor in chief of Italian gossip magazine Chi, told ABC News: "It is not my competence to say whether this guy is innocent or not, but he has certainly exploited a gap in the Italian market where the gossip business has just recently started."

As for the self-proclaimed Robin Hood paparazzo, business is going even better now that the media are crazy about him and the Italian public is following his story with morbid attention. His company's profit has increased by 40 percent.

If prosecutors are taking the matter seriously, for the majority of Italians it has become a subject of amusement. "This story contains sex, money and beauty -- it is the basic stuff that interest people," Iozzia told ABC News.

"We laugh about it. It is stuff that everybody knows," said Francesco Viviano from La Repubblica, one of the main Italian newspapers. "Everybody knows how the celebrity world works."

The famous are not amused. Soccer star Francesco Totti was allegedly photographed visiting the house of television personality Flavia Vento. He allegedly paid 50,000 euros ($66,000) to prevent the publication of photos because his wife was pregnant.

Barbara Berlusconi, 22, bought $26,000 worth of pictures showing her coming out of a nightclub with a male friend. She said she bought the pictures simply because they were ugly photos, not because she was doing anything wild.

The lead prosecutor in the case, Henry John Woodcock, 39, has introduced a parade of celebrities, businessmen and showgirls for questioning in the case. Daily papers report abundantly, if not gleefully, on developments.

The case has led regulators to toughen privacy rules and threaten journalists with jail. Several weeks ago, Italy's privacy regulator ruled that magazines which feature the sexual and other exploits of the rich and famous must stop spreading gossip that is not strictly in the public interest.

Journalists face sentences of between three months and two years if they publish news that invades people's privacy, especially of a sexual nature, according to a Reuters report.

The scandal reached the highest level of Italian politics when a newspaper identified one victim of the blackmail scam as Silvio Sircana, the spokesman for Prime Minister Romano Prodi's government. It became public news after Sircana was caught on camera pulling over and chatting with a transsexual prostitute through the passenger side window.

Prodi said Sircana was "victim of an attack that is not worthy of a serious country."

Even Berlusconi, who has often complained of being the victim of abuse by the media, condemned the episode. "The way things are going, it's the victims of blackmail who are being put in the dock," he said, according to Reuters..

Sentiment against the paparazzi may have turned a decade ago after the death of Princess Diana, who was being chased by photographers on motorcycles when her car smashed into a tunnel in Paris.

In the United States, more celebrities have been suing (and punching out) paparazzi and taking steps to keep them away. California passed a law in 2005 to help protect the glitterati from the pack. The law came after Los Angeles authorities tried to crack down on aggressive photographers following a series of altercations involving actresses Reese Witherspoon, Lindsay Lohan and Scarlett Johansson, among others.

Lohan and Johansson were both involved in car accidents that they say were caused by aggressive photographers. A photographer trying to take a picture of Witherspoon's young daughter at an amusement park was charged with assaulting two park workers after they tried to intervene.