A financial adviser to celebrities includingWesley Snipes and Sylvester Stallone has been arrested on chargesthat 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 aninitial court appearance in federal court in Manhattan. Alsoarrested in the probe was former New York City Council PresidentAndrew Stein.
Stein was charged with making false statements in a filing withthe Internal Revenue Service and making false statements to afederal officer. It was not immediately clear who would representeither of them in court.
The charges against Starr were announced in Manhattan by federalprosecutors, who scheduled a news conference for later Thursday.
Starr, an attorney, is head of New York-based Starr and Co. andStarr Investment Advisors LLC., which federal regulators said hasaccounts exceeding $700 million.
A separate complaint filed in federal court by the Securitiesand Exchange Commission said Starr provides investment advisoryservices to more than 30 high net-worth clients. It said heprovides services including accounting, tax preparation, businessmanagement, bill-paying and "concierge" services to a largergroup of about 175 clients.
The SEC complaint said Starr and others have power of attorneyor signatory authority enabling them to control many bank andinvestment 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. Thefive-bedroom, six-and-a-half-bath apartment includes a recreationroom with a wet bar, a 32-foot granite lap pool and a 1,500square-foot garden.
Starr testified in 2008 that he warned Snipes that he could getinto trouble if he didn't pay his taxes.
Snipes, the star of the "Blade" movies, was convicted inFlorida of three counts of failing to file tax returns. He wascleared on fraud and conspiracy charges.
Starr also once advised Stallone. Stallone later sued him,saying Starr advised him to keep his investment in Planet Hollywoodrestaurants even though Starr told others the chain was headed forbankruptcy. The suit was eventually settled.Copyright © 2014, The Baltimore Sun