New York Investment Advisor "To The Stars" Arrested & Charged With Fraud

Kenneth I. Starr, 66, of New York City, was arrested and charged last Thursday with wire fraud, fraud by an investment advisor and money laundering in connection with the alleged Ponzi-type investment fraud scheme that defrauded his clients as much as $30 million. According to prosecutors, Starr, through his firm Starr & Company, LLC, ran a complex set of schemes involving his son, his wife, Diane Passage, prominent New York Democratic Party politician Andrew Stein and "a former national official of a major political party," and "a partner at a prominent national law firm." Starr, no relation to Whitewater prosecutor Kenneth W. Starr, counted noteworthy Hollywood clients such as Wesley Snipes, Uma Thurman, Goldie Hawn, Al Pacino, Sylvester Stallone, Candice Bergen, Martin Scorsese, and Ron Howard. Other high profile clients reportedly include former William Morris chairman Jim Wiatt, photographer Annie Leibovitz, Jacob "Jacob the Jeweler" Arabov, illusionist David Blaine, heiress Rachel "Bunny" Mellon, publisher Robert Ziff, former Secretary of State Henry Kissinger and Caroline Kennedy. According to the complaint, Starr engaged is two types of fraudulent schemes: first, soliciting investments from his clients and then diverted the money to himself, his family and close associates; and second, making unauthorized transfers of client funds to himself and close associates. We note that Starr is an attorney by training and his wife, Dianne Passage is reportedly a former stripper and pole dancer who became his third wife.

Read the story here, here and here.

Read the indictment here.

Hat tip: Reader Doug

Update (3/3/11): Starr was sentenced to 7 1/2 years in prison. He had pleaded guilty last September to wire fraud and money laundering.