Monday, 26 January 2015
Last updated 1 hour ago
Sep 13 2010 | 11:37am ET
Kenneth Starr, the homophonically-pleasing money manager to the stars, has pleaded guilty to defrauding those very celebrities.
Starr admitted to ripping off his clients, who included an unidentified hedge fund manager, to the tune of between $20 million and $50 million. His plea deal calls for up to 12-and-a-half years in prison when he is sentenced on the wire fraud, money laundering and investment-adviser fraud charges.
Starr has also agreed to forfeit his S7.5 million New York condominium, and prosecutors say they may still seek $100 million in forfeitures and restitution. Starr’s lawyer told said that she was in talks with the government about the forfeiture and that it would likely be substantially less than that.
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.
“I used a portion of the money for my own purposes,” Starr told U.S. Magistrate Judge Theodore Katz.
“He made a colossal error in judgment,” Starr’s lawyer, Laura Edwards, said. “He’s paying a very, very heavy price.”
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…