A grandson of late Fiat magnate Gianni Agnelli is facing charges for falsely reporting he had been kidnapped, according to police.
Lapo Elkann allegedly concocted the story in order to get ransom money after running out of cash during a drug-fuelled binge, unnamed law enforcement sources told the Reuters news agency.
The 39-year-old claimed he was being held against his will in a flat in Manhattan, New York, from 6pm on Friday to 10.30pm on Saturday.
According to the New York Daily News, he rang his family and said a woman would hurt him unless a $10,000 ransom was paid.
A family representative allegedly dropped off the payment to police.
Officers said he had met a 29-year-old escort and the two took drugs before he made the false claim.
Mr Elkann and his brother, Fiat Chrysler chairman John Elkann, are heirs to Italy's biggest industrial dynasty.
It is the second time he has been linked to drug use after he nearly died of a drug overdose in 2005.
Mr Elkann, who founded a sunglasses company in 2007, was taken into custody on Sunday.
Shares in his business, Italia Independent, fell sharply after news of the arrest emerged.
He has since been released and is due in court in New York in January.
His family and his spokesman have declined to comment.
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