Well-known financial adviser Kenneth Ira Starr was charged by the U.S. with defrauding clients of $30 million, prosecutors said. Starr’s firm, the Starr Investment Advisors manages more than $700 million including the assets of several socialites and celebrities.
The US financial regulator, the Securities and Exchange Commission (SEC) also filed a civil lawsuit against Starr today; claiming his New York-based firm was indulged in fraud practices and he cheated wealthy clients at Starr Investment Advisors and others at Starr & Co. Starr controls both firms.
The 65-year-old financial wizard is also a lawyer and according to SEC he has used his power of attorney or signatory authority over client accounts to transfer client funds to his own account.
In its lawsuit, the SEC alleged that Starr purchased in April a 5-bedroom, 6 ½ bathroom Manhattan apartment with a 32-foot granite lap pool and a 1,500 square-foot garden by drawing about $7 million from client accounts.
“This is an emergency action brought to halt an ongoing fraudulent scheme,” the SEC said in its complaint. The SEC has also charged Andrew Stein, the former borough president in Manhattan. Stein has been charged in criminal case and is accused of aiding Starr’s alleged fraud. The SEC also sued Starr’s wife, Diane Passage. In its complaint against Passage, the SEC says “Passage purports to be a producer of films and plays, and a philanthropist.”
