Alleged Ponzi Schemer Kenneth Starr Targeted Stars (Updated)

By

The SEC and the U.S. Attorney's office today charged Kenneth Starr, a Manhattan attorney and money manager whose clients include Wesley Snipes, Sylvester Stallone, Jacob the Jeweler, Steve Brill, Annie Leibovitz, and at least 25 other "socialites and luminaries in the entertainment and business worlds," according to the complaint, with running a Ponzi scheme in which he used clients' money to, among other things, purchase a "luxury $7.6 million Manhattan apartment" containing "a recreation room with a wet bar, a 32-foot granite lap pool, and a 1,500 square foot garden."

Andrew Stein, the former Manhattan borough president and one-time paramour of Ann Coulter was also arrested in conjunction with the fraud, for using funds from a shell company Starr created to pay his own personal expenses and lying to the IRS about it, and we expect assorted other boldface names to surface shortly. For instance, the Daily Beast is reporting of the person the indictment refers to as "Client No. 2":


No. 2 is identified as an “actress" who marched into Starr’s offices on April 26 demanding to know where $1 million of her money had gone. Within a day, the money had been returned to her, but the feds allege that it was not her money being paid back to her. Rather, it was the money of “client 3” — a former talent agent and his wife. The actress is none other than Uma Thurman, according to several sources close to her.

Marching! Dramatic! Manhattan U.S. Attorney Preet Bharara suggested at a news conference today that Starr targeted celebrities in order to brand himself. “Starr ... used his access to famous and powerful clients to burnish an image of trustworthiness, inducing them to entrust him with management and control of their financial affairs," he said. "But as we allege, much of it was a mirage." Poor celebrities. Even their real lives are illusory.

Update: A spokesman for the financially-challenged Annie Leibovitz sends the following statement from the photographer: "News of Ken Starr’s arrest does not come as a complete surprise to me, and I will follow this story with great interest. Ken Starr no longer represents me and has not for some time."

Adviser to Celebrities Held in Investment Fraud [NYT]
How Uma Helped Nail Money Manager [Daily Beast]
2nd UPDATE: NY Financial Adviser Starr Charged In $30M Fraud Case [WSJ]