Celebrity financial advisor arrested

Kenneth Starr, a New York
investment adviser to celebrities such as movie director Martin Scorcese and
actor Uma Thurman, was arrested by U.S. agents on charges of running an alleged
investment fraud of as much as $30 million, prosecutors said.

 Criminal and civil complaints filed in
Manhattan federal court said Starr, 65, who is also a lawyer, bilked high
net-worth investors through Starr Investment Advisers and Starr & Co. His
wife, Diane Passage, and Colcave, another firm Starr controlled, were also
named as defendants in civil charges filed by the U.S. Securities and Exchange
Commission.

The criminal complaint also charged
prominent New York City politician Andrew Stein, a Democrat, with making false statements
to the Internal Revenue Service and failing to disclose the existence of an
entity called Wind River.

Starr stated that funds going to
Wind River were loans to Stein, a former president of the New York City
Council, for his work as a “placement agent” for investments,
according to an affidavit filed in court by an IRS agent.

The criminal complaint said that
since at least January 2008 through April 2010, “Starr marketed his
services as an accountant and financial adviser to clients, gained control over
millions of dollars belonging to his clients, and then misappropriated millions
of dollars of his clients’ assets for his own personal use, including to
purchase himself a new, multimillion-dollar residence” worth $7.5 million.

Starr, whose client list includes
Scorcese, Thurman and celebrity photographer Annie Leibowitz,, was expected to
make an initial appearance in court on charges of wire fraud, investment
adviser fraud and money laundering.

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