Friday, 24 February 2017
Last updated 2 hours ago
May 28 2010 | 10:53am ET
A New York financial adviser with a star-studded list of clients has been arrested and charged with ripping those clients off to the tune of $30 million.
One of the victims of the scam, which included the widow of billionaire Paul Mellon, was an unidentified hedge fund manager, according to the charges against Kenneth Starr filed in Manhattan federal court.
Over the years, Starr Investment Advisors and Starr & Co. advised such Hollywood names as Goldie Hawn, Ron Howard, Martin Scorsese, Wesley Snipes, Sylvester Stallone and Uma Thurman. Assuming control over some of their financial lives, Starr then used that access to enrich himself and his friends, the criminal complaint alleges. According to prosecutors, he solicited money for investments that he then stole, as well as simply stealing money from their accounts. He also ran a Ponzi scheme, using client money to repay clients who wanted out.
Starr allegedly spent the money he stole on his $7.5 million Upper East Side apartment and the “extravagant personal expenses” of former New York City Council President Andrew Stein, an associate of Starr’s.
According to the Securities and Exchange Commission, which has filed civil charges against Starr, he managed more than $700 million for 30 clients, and does tax preparation and other services for 175 more.
Starr was arrested yesterday at his Manhattan apartment, where he was found hiding in a closet, according to prosecutors. He was ordered held without bail.
Stein, also arrested, was released on $250,000 bond, and denies the charges of making false statements to the Internal Revenue Service.