Kenneth I. Starr – a 66-year-old Manhattan investment advisor with a long list of celebrity clients – was arrested at his home on Thursday, charged with fraud and executing a $30 million Ponzi scheme between January 2008 and April 2010.
Starr associate Andy Stein -- former Manhattan borough and New York City Council president and son of the publisher Jerry Finkelstein -- was also arrested on Thursday, charged with lying to federal authorities during their investigation of Starr.
Both Starr and Stein appeared in a Manhattan court on Thursday. Starr was denied bail and detained; Stein was released on a $250,000 personal recognizance bond. No pleas were entered.
Starr’s reported client list is peppered with some of Hollywood’s heavyweights, including Uma Thurman, Martin Scorsese, Goldie Hawn, Candice Bergen, Ron Howard, Mike Nichols and Wesley Snipes, photographer Annie Leibovitz, as well as former Secretary of State Henry Kissinger and Caroline Kennedy.
Representatives for Scorsese, Hawn, Howard and Nichols confirmed they were former clients of Starr, but had not been for some time. A rep for Thurman did not return a request for comment; a rep for Bergen said the actress could be reached. Leibovitz said Thursday Starr's arrest "does not come as a surprise."
A spokesman for Ron Howard said the director cut ties with the financial adviser "five months ago," said Michael Rosenberg, president of Imagine Entertainment. He did not provide a reason for the break.
Starr – who has no relation to the Ken Starr who blew the lid on Bill Clinton’s affair with Monica Lewinsky -- is the chairman and CEO of Starr & Company, which he founded in 1989.
A lawyer for Starr did not return a phone message seeking comment.
According to the 37-page criminal complaint filed in the U.S. Southern District of New York, Starr was charged with five counts: wire fraud scheme to obtain property; fraud by an investment advisor; money laundering; making false statements on an IRS filing; and making false statements to a federal officer. (Read the full criminal complaint here.)
"He used his access to famous and powerful clients to burnish his image of trustworthiness, leading his clients to entrust him with management and control of their financial affairs," IRS Special Agent Robert Beranger alleges in court documents.
According to federal officials, Starr bought a new, five bedroom, 6.5 bath Upper East Side condominium for at least $7.5 million using funds of his clients. (According to the real estate listing described in the federal complaint, the condo includes a 32 foot lap pool – “rare for Manhattan” – next to a 36 x 27 foot “recreation room with a wet bar and adjacent prep kitchen.”)
According to the complaint, Starr used money from “an elderly heiress” to pay for the apartment.
Another of Starr’s victims – an actress identified in federal documents as “Client 2” – allegedly confronted Starr after discovering $1 million was missing from a bank account Starr controlled.
