Hollywood money guru Ken Starr arrested

7:28 AM PST 05/27/2010 by Georg Szalai, Kaitlin Knoll

Adviser charged with running fraud, Ponzi scheme

Read the Ken Starr indictment

NEW YORK -- Ken Starr, a Manhattan investment adviser to some big Hollywood names, was arrested Thursday, with authorities charging him with running a major fraud and Ponzi scheme.

Starr's client list reportedly includes Uma Thurman, Goldie Hawn, Candice Bergen, Martin Scorsese, Ron Howard, former William Morris chairman Jim Wiatt, Annie Leibovitz, former Secretary of State Henry Kissinger and Caroline Kennedy.

U.S. Attorney for the Southern District of New York Preet Bharara said at a press conference Thursday that the Starr case is a $30 million fraud case so far.

Starr is currently charged on three counts, according to Bharara: wire fraud, fraud by an investment advisor and money laundering.

The 37-page complaint listed several unnamed clients, including a former hedge fund manager and philanthropist, an actress and a former executive of a talent agency (believed to be Wiatt), along with an elderly heiress and a jeweler who is a convicted felon.

The actress became concerned when a bank representative asked whether she knew why $1 million was wired to someone else on April 13, Bharara told reporters. This was the first she had heard of the transaction. After she confronted Starr about it, the money was eventually put back into her account.

Later, it was found out that Starr took that $1 million from a different client though.

The complaint charges Starr with stealing money directly from his clients to invest in dubious ventures that he himself held a financial interest in.

Currently, $14 million is still unaccounted for from two clients.

In or about April, Starr purchased a new condo on Manhattan's Upper East Side for at least $7.5 million using funds of his clients.

Said Bharara: "The investigation is still in the early stages, but it is moving with great speed." Starr's office is being searched, and 23 bank accounts have been frozen, he said.

Authorities are also trying to identify additional clients and accounts as Starr has over 200 clients.

The oldest incident of fraud authorities have come across so far is from early 2008.
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