A fallen money manager to the stars -- including marquee names like Sylvester Stallone, Uma Thurman, and Martin Scorsese --pleaded guilty Friday to essentially operating a $50 to $60 million scam that cheated his wealthy and elderly clients.
Kenneth Starr, 66, admitted to charges of wire fraud, money laundering and investment advisor fraud, agreeing to a plea deal putting him behind bars for 10 to 12 and a half years.
"I used a portion of the money for my own purposes," Starr told Magistrate Theodore Katz in Manhattan federal court. He's been jailed since his May arrest, unable to meet a $10 million bail package.
Starr's lawyer called her client's actions a "colossal error in judgment."
Prosecutors say he carried out his Ponzi-like scheme from January 2008 through April.
Starr admitted committing investment adviser fraud since 2005, losing between $20 million and $50 million of his clients' money.
"Kenneth Starr's is a tale of fiction and fraud, in which he played the role of legitimate investment adviser to a cast of unsuspecting
victims," said Preet Bharara, the United States Attorney for Manhattan. "It is also a cautionary tale for everyone who must rely on financial professionals."
Starr, through his firm Starr & Co., was in the business of managing the assets of, and providing financial planning and investment advice to, high net-worth and celebrity clients. Among other things, Starr paid bills for his clients, assisted them with tax filings, and recommended investments to them.
In some cases, the now admitted swindler assumed total control over his clients' financial lives by collecting their earnings, investing their savings, and paying their bills.
Despite the plea deal, Starr can request an alternate sentence, which defense attorney Laura Edwards said she will pursue. Sentencing was set for Dec. 15.
She said she will cite numerous charitable deeds her client has performed over decades.
"All the good hopefully will not be forgotten," she said.
Edwards said greed was not her client's motive, though she did not explain what was behind his misappropriation of his clients' money.
"He made a colossal error in judgment which he recognizes," she said, adding that he is paying "a very, very heavy price."
She said she expects to prove that an appropriate amount of restitution for her client is much less than the maximum $50 million that can be imposed.