Financial advisor and accountant to the stars Kenneth Starr has been sentenced to 90 months in prison for defrauding his celebrity clients out of millions of dollars.
The sentence was imposed Wednesday in Manhattan federal court by U.S. District Judge Shira A. Scheindlin. Starr (not to be confused with former independent counsel Ken Starr) pled guilty last September to one count of wire fraud, one count of money laundering, and one count of fraud (see ‘Mini Madoff’ Starr Pleads Guilty to $50 Million Fraud).
For decades, Starr, 67, served as a financial planner and investment advisor to numerous clients, including high-net-worth businessmen and well-known celebrities, including actresses Uma Thurman, Goldie Hawn and Candice Bergen; actors Al Pacino and Sylvester Stallone; director Martin Scorsese; writer Nora Ephron; fashion designer Isaac Mizrahi; former Secretary of State Henry Kissinger; and the late Ambassador Richard Holbrooke. Actor Wesley Snipes, who is currently in prison on tax charges, tried to use Starr’s testimony in his trial as a defense in his unsuccessful appeal last year.
Through the two companies he controlled—Starr & Co. LLC and Starr Investment Advisers LLC—Starr managed his clients’ finances, paid their bills, advised them about their taxes, and made investments on their behalf and for their benefit. In some cases, he assumed total control over his clients’ finances by collecting their earnings, investing their savings, and paying their bills.
Between 2005 and 2010, Starr participated in fraudulent schemes that involved more than $33 million in actual or intended losses, according to prosecutors. First, between March 2009 and April 2010, Starr stole millions of dollars from his clients. He did this by directing unauthorized transfers of funds from his clients’ accounts to one of two attorney escrow accounts, and by causing funds to be transferred from the attorney escrow account for his benefit. He used these escrow accounts in order to conceal the true source of the funds, as well as his unlawful activity.
Among other things, Starr misappropriated funds from his clients in order to buy a $7.5 million luxury condominium on the Upper East Side of Manhattan; to cover the operating expenses of Starr & Co; to repay clients who discovered Starr had stolen money from them; and to pay a $4 million legal settlement with a former client, a playwright and screenwriter in his 80s who has been identified as Neil Simon, according to The Daily Beast.
“Kenneth Starr pretended he had the Midas touch, but he was in reality peddling fool's gold,” said Manhattan U.S. Attorney Preet Bharara in a statement. “Today’s sentence is just and appropriate for the audacious fraud he perpetrated on many victims. It sends a strong message to financial professionals who exploit their positions of trust for their own personal gain that, in the end, it is they who will pay.”
Under the terms of his plea agreement, Starr admitted that he was responsible for $33,312,782.69 in actual or intended loss to his victims. He agreed to pay restitution of $29,112,782.69. To satisfy his restitution obligations, Starr has already forfeited his interest in his Upper East Side apartment. Judge Scheindlin will impose restitution some time after April 4, by which date any additional restitution claims must be submitted to the court.
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