NEW YORK (AP)—A financial adviser to celebrities including Wesley Snipes and Sylvester Stallone has been arrested on charges that he carried out a $30 million fraud on his clients.
Kenneth Starr, 65, of Manhattan was charged with wire fraud, investment adviser fraud and money laundering and was awaiting an initial court appearance in federal court in Manhattan. Also arrested in the probe was former New York City Council President Andrew Stein.
The charges against Starr were announced in Manhattan by federal prosecutors, who scheduled a news conference for later Thursday.
Starr, an attorney, is head of New York-based Starr and Co. and Starr Investment Advisors LLC., which federal regulators said has accounts exceeding $700 million.
A separate complaint filed in federal court by the Securities and Exchange Commission said Starr provides investment advisory services to more than 30 high net-worth clients. It said he provides services including accounting, tax preparation, business management, bill-paying and "concierge" services to a larger group of about 175 clients.
The SEC complaint said Starr and others have power of attorney or signatory authority enabling them to control many bank and investment accounts belonging to their clients.
As a result, it said, Starr was able to use some of his clients' funds to purchase a luxury $7.6 million Manhattan apartment. The five-bedroom, six-and-a-half-bath apartment includes a recreation room with a wet bar, a 32-foot granite lap pool and a 1,500 square-foot garden.
Starr testified in 2008 that he warned Snipes that he could get into trouble if he didn't pay his taxes.
Snipes, the star of the "Blade" movies, was convicted in Florida of three counts of failing to file tax returns. He was cleared on fraud and conspiracy charges.
Starr also once advised Stallone. Stallone later sued him, saying Starr advised him to keep his investment in Planet Hollywood restaurants even though Starr told others the chain was headed for bankruptcy. The suit was eventually settled.