Ken Starr arrested for fraud
http://www.postchronicle.com/news/business/article_212303995.shtmlKenneth 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 Thursday on charges of running an alleged investment fraud of as much as $30 million, prosecutors said.
According to an affidavit filed in Manhattan federal court by an Internal Revenue Service agent, Starr ran a complex set of schemes involving his son, his wife, prominent New York Democratic Party politician Andrew Stein and "a former national official of a major political party," and "a partner at a prominent national law firm."
The criminal complaint charging Starr with wire fraud, investment adviser fraud and money laundering alludes to a "who's who" of wealthy New Yorkers as his clients or associates -- "an actress," "an elderly heiress," a "retired prominent basketball player" and a jeweler. None of them were identified in court documents.
Starr's son, the complaint said, would ferry checks to and from clients and Starr's associates, at one point traveling to Venezuela to transfer money on behalf of a client. The son has not been charged, but Stein is accused of lying to the IRS.
Starr, 65, is accused of bilking high net-worth investors through Starr Investment Advisers and Starr & Co. His wife, Diane Passage, and Colcave LLC, another firm Starr controlled, were also named as defendants in civil charges filed by the U.S. Securities and Exchange Commission.
Stein, a former president of the New York City Council, was charged with making false statements to the Internal Revenue Service and failing to disclose the existence of an entity called Wind River LLC, a shell company established in 2008 by an unidentified lawyer.
Starr stated that funds going to Wind River were loans to Stein for his work as a "placement agent" for investments, according to the affidavit.
Both Starr and Stein were arrested by IRS agents and were scheduled to make initial appearances in court on Thursday.
