Kenneth Starr, a New York investment adviser with a long list of celebrity clients (not to be confused with the Ken Starr who prosecuted Clinton), was was arrested by U.S. agents on Thursday on charges of running an alleged investment fraud– more specifically a Ponzi scheme– of as much as $30 million. According to Reuters, both civil and criminal charges were filed against Starr, 65, accusing him of swindling his high net worth clients through Starr Investment Advisers and Starr & Co. The civil charges also name his wife, Diane Passage, and Colcave LLC, another firm Starr controlled, as defendants in civil charges filed by the SEC.

According to Reuters,

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 LLC.

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.

According to the criminal complaint, Starr misappropriated funds, ripped off his clients and used the cash to buy himself a posh new house.

NBC News reports,

Ken Starr, who boasts a client list that includes Annie Leibovitz, Uma Thurman, Martin Scorsese, Wesley Snipes, Henry Kissinger, Caroline Kennedy and Robert Ziff among others, was arrested by IRS agents this morning and is expected to face investment fraud, tax fraud and other related charges, officials said. He is expected to appear in court later today.

Tags: Andrew Stein, IRS, Kenneth Starr, Ponzi Scheme, SEC

This entry was posted on Thursday, May 27th, 2010 at 5:22 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.