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A former financial adviser to the stars has been sentenced in New York City to more than seven years behind bars for a multimillion-dollar investment scheme.
Admitted conman Kenneth Starr was sentenced Wednesday in federal court to serve seven years and six months in prison.
Lawyers for Starr — the disgraced, one-time financial adviser to Wesley Snipes, Sylvester Stallone and Martin Scorsese — had asked for leniency in his multimillion-dollar investment fraud case by saying he showed character by stealing only from the very rich and giving to the poor through his own charitable foundation.
Prosecutors counter that Starr valued one cause above all others: Starr. The spoils from his scheme, they say, bankrolled a lavish lifestyle that included a $7.5 million luxury condo on the Upper East Side of Manhattan where he lived with his second wife, a former exotic dancer.
The conflicting portrayals are expected to come into play Wednesday, when the jailed Starr is scheduled to be sentenced in federal court in Manhattan. Prosecutors say he deserves a minimum 10 years behind bars — twice what the defense wants.
Starr, 67, pleaded guilty last year to cheating wealthy and elderly clients since 2005 by diverting their money into risky investments or into his own pockets. Prosecutors put the losses at $33.3 million.
The same investigation also snared a once-prominent New York City politician, Andrew Stein. The former City Council President and state assemblyman is awaiting sentencing after pleading guilty to failing to pay income taxes — a charge stemming from a fraudulent loan engineered by Starr.
There's no indication Snipes, Scorsese or Stallone took a hit. The identities of the victimized clients — including a former hedge fund manager and well-known philanthropist, an actress who was a longtime friend of Starr's, a 100-year-old heiress to a business empire and a prominent jeweler with a flagship Manhattan store — have been kept secret.
In recently filed court papers, lawyers for Starr concede he "made a colossal error in judgment which has had a devastating impact." But there were only nine victims, all "incredibly wealthy individuals with millions of dollars of discretionary funds," the papers add.
At the same time, the defense says the father of two teenage daughters deserves credit for starting a foundation that donated hundreds of thousands of dollars to various causes.
"A man should not be judged solely by the worst thing he has ever done," the papers say. "Kenneth Starr has also brought joy and comfort to countless people in need of assistance."
Prosecutors scoff at the notion Starr's crimes were a mere mistake.
Starr "systematically defrauded his own longstanding clients, individuals who trusted him to advance their financial interests, not his own," they wrote in their own submissions. "Whatever other acts of charity and altruism the defendant may have performed in his life, it is clear that in this case the defendant serially victimized his clients in order to help himself."
The Starr fraud was a Madoff-like Ponzi scheme because he paid some early investors off with money he received as investments from other clients, the government has said. Along with buying his five-bedroom apartment, he used other funds to cover business expenses, repay clients who caught him cheating and pay a $4 million legal settlement.
After his arrest, Starr returned a fraction of the money, and has agreed to pay another $29 million in restitution. But prosecutors call it a long shot, predicting victims may recover only 10 percent of their losses.
"The defendant's restitution obligations already dwarf the likely repayment," they wrote.