Fraudster Starr Pleads Guilty

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.”

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…