New York prosecutor drops charges against Fiat heir Lapo Elkann

By David Ingram

NEW YORK (Reuters) - New York prosecutors have dropped charges that Lapo Elkann, grandson of late Fiat patriarch Gianni Agnelli, falsely reported he was kidnapped in November in an effort to get ransom money.

The office of Manhattan District Attorney Cyrus Vance said on Wednesday it had declined to prosecute the case but gave no other details.

Elkann, 39, had apparently concocted a fake abduction scheme after running out of cash during a drug-fueled partying binge, a law enforcement source said.

A U.S. defense lawyer for Elkann, Randy Zelin, confirmed there would be no prosecution and said his client was grateful justice had prevailed.

He declined to provide details of what the investigation showed. Earlier reports about the incident had amounted to "false news," he added.

"Today's decision is so heartening and reinforces the faith I have always placed in American justice," Elkann said in a statement, adding he had gone through a difficult period but had been able to reflect over what happened and about the future.

"I'm clear in my determination to continue to work on myself," he said.

Elkann, along with his older brother, Fiat Chrysler (:FCHA.MI) Chairman John Elkann, is an heir to Italy's biggest industrial dynasty. Lapo Elkann nearly died of a drug overdose in 2005 after collapsing in the apartment of a transsexual prostitute.

While the elder Elkann is known as shy and reserved, Lapo's flamboyant style has made him a celebrity in Italy, where he owns a stable of luxury sports cars and is dedicated to his family's soccer club, Juventus (Milan:JUVE.MI - News).

In November, Elkann told New York City police he had been held against his will at a Manhattan apartment for more than a day. A law enforcement source said Elkann met a 29-year-old man through an escort website and that they used drugs together before the kidnapping report.

Elkann was released after his arrest and had been due in court on Wednesday until the charges were dropped. He now wants to leave the episode behind him, his lawyer said.

"I want the wind at his back," Zelin said. "Look at him as the creative, brilliant and philanthropic person that he is."

Elkann no longer holds any positions at Fiat, but is on the board of directors at luxury carmaker Ferrari (Milan:RACE.MI - News), one of the companies controlled by his family.

In 2007 he founded sunglasses company Italia Independent (:IINT.MI), which debuted on the Milan stock market in 2013 and in which he had to invest more money in late 2015 to cover losses.

The Agnelli family's investment holding company Exor (:EXOR.MI) also owns reinsurer PartnerRe and has holdings in truck and tractor maker CNH Industrial (Milan:CNHI.MI - News).

(Reporting by David Ingram; Additional reporting by Nate Raymond in New York and Valentina Za in Milan; Editing by Jeffrey Benkoe and Sandra Maler)