Kenneth I. Starr
|Kenneth I. Starr|
|Born||The Bronx, New York|
|Other names||Ken Starr|
|Alma mater||Queens College, City University of New York|
|Occupation||Money manager, lawyer|
Kenneth Ira Starr is a disbarred attorney and former money manager convicted of running a $35 million Ponzi scheme with the money of numerous wealthy and celebrity clients. Sentenced in March 2011, Starr is currently serving out his 7.5-year prison term at the Otisville, New York Federal Correctional Institution and is due to be released in 2016, pending good behavior.
Early life and education
Early career and financial problems
After first working as an accountant, originally in a Manhattan firm, later as a solo accountant, then in an investment firm founded with his brother Warren Starr, also an attorney, Starr finally formed his own investment company, Starr & Company, LLC (Starrco). Starr gained wealthy and well-known clients, business associates and friends including Blackstone founder Pete Peterson, Las Vegas consultant Sig Rogich, restauranteur Shelly 'Shelly's' Fireman, and a Who's-Who of Hollywood stars like Al Pacino, Natalie Portman, Martin Scorsese, Carly Simon, Wesley Snipes, Sylvester Stallone, and Uma Thurman. He has been called a 'mini-Madoff' for the kind of clients he attracted, the breach of trust, and his notoriety.
Starr's financial and legal problems began to surface in the late-1990s after he was sued by Sylvester Stallone in connection with the Planet Hollywood restaurant chain and Starr's alleged role in Stallone's $10 million loss. This and several other civil settlements were the early signs that something was amiss with Starr; prosecutors have suggested that these settlements may have permitted him to avoid other charges for earlier criminal conduct. The problems remained out of the public spotlight for some time. After these financial setbacks and while Starr was still married to his third wife, Starr met his future fourth wife, Diane Passage, a stripper at the Scores strip club in Manhattan. Starr was eager to satisfy her financially. As his financial world began to crumble, Starr's then-third wife, Marisa Vucci Starr, resigned as Starrco's office manager. This left only Starr's son, Ron Starr, also an attorney and then Chief Compliance Officer, as the only family member and officer left at the company. His involvement or failure to oversee caused some concern because he was both a Compliance Officer and a lawyer. This also has led to further comparison with Bernie Maddoff, whose sons Andrew and Mark were also employed by the company and, as with Ron Starr, were not criminally prosecuted. Ron Starr continues to work as a financial advisor in Manhattan.
Indictment, arrest, conviction, and sentencing
In May 2010, Starr was indicted and arrested on 23 criminal counts including various fraud charges and money laundering. When authorities went to arrest him, they found him hiding in a closet at the very upscale Manhattan apartment he purchased and lavishly furnished from stolen funds.
At a bail hearing in July 2010, Starr's bail was set at $10 million, but none among his wealthy family and friends, alone or in collaboration, would agree to post.
In September 2010, Starr pleaded guilty in federal court. He was sentenced by United States District Court judge, Shira Scheindlin, in March 2011 to a 7.5-year prison term. Judge Scheindlin opted for leniency, arguing essentially that victims of the disgraced celebrity accountant, such as Uma Thurman, Lauren Bacall, Neil Simon, Denise Rich, and Jim Wiatt, were rich and did not go broke as a result of his fraud scheme. At sentencing, Scheindlin specifically named Diane Passage as an immoral influence on Starr.
Starr is currently serving his prison sentence at the Federal Correctional Institution located in Otisville, New York, and is scheduled to be released on December 8, 2016.
The investigation of Starr led to the arrest and conviction of longtime Democratic politician, New York City Council member and former Manhattan Borough President Andrew Stein for lying to federal investigators about his involvement with Starr's multi-million dollar Ponzi scheme. Stein was later sentenced to 500 hours of community service.
After divorcing his first wife, he married his second wife, Sheila Starr, who was his then-current office manager. Sheila Starr then hired Starr's future third wife, Marisa Vucci Starr, to replace her as office manager.
After divorcing his second wife, Starr was married in 1991 to his third wife, Marisa Vucci Starr, Starrco's then-current office manager. He and his third wife have two daughters: Samantha Starr, and Alexa Starr. While still married to his third wife, Marisa, who was by then suffering from advanced multiple sclerosis, Starr met Diane Passage, a single mother and dancer at the Scores strip club. In 2007, Starr and Marisa divorced; the couple has two daughters.
In 2007, Starr married his fourth wife, Diane Passage, who stopped working as a stripper at Scores after they met. After her husband's imprisonment in the fall of 2010, Passage filed for divorce in July 2011, claiming she could not wait for the completion of his prison sentence in the year 2016. Starr and Passage were divorced on March 20, 2013.
- Chad Bray and Amir Efrati (May 28, 2010). "Adviser Starr Charged With Fraud". The Wall Street Journal.
- Brian Cronk (May 28, 2010). "Adviser Starr Is Charged With Fraud" (blog). The Wall Street Journal.
- Nelson D. Schwartz (June 6, 2010). "Untangling a Ponzi Scheme With a Hollywood Twist". The New York Times.
- Michael Shnayerson (August 2010). "All The Best Victims". Vanity Fair. Retrieved August 31, 2011.
- Golding, Bruce; Fermino, Jennifer (March 3, 2011). "Celeb Ponzi schemer Kenneth Starr sentenced to 7 1/2 years in prison". New York Post.
- Dylan Stableford (March 3, 2011). "Ken Starr, Hollywood’s Mini-Madoff, Gets 7.5-Year Jail Sentence". TheWrap. Retrieved January 2, 2015.
- Dan Primack (January 19, 2011). ""Letters" in support of a mini-Madoff". Fortune. Retrieved January 2, 2015.
- DealBook (May 28, 2010). "Adviser to Stars Named in Madoff-Like Fraud". The New York Times. Retrieved January 2, 2015.
But when they arrested him on Thursday, federal prosecutors described him as something else: a mini-Madoff who diverted $30 million of his clients’ money to buy himself a sprawling Upper East Side condo complete with an indoor swimming pool and a 1,500-square-foot garden.
- Robert Schmidt (September 2, 2010). "Wayne McLeod: The Life and Death of a Mini-Madoff". Bloomberg Businessweek. Retrieved January 2, 2015.
The financial crisis also led to the arrests of a string of "mini-Madoffs," whose crimes, while not as massive, were just as brazen. They include New York money manager Kenneth Starr, arrested in May and charged with stealing at least $59 million from movie stars and other celebrities.
- Hurtado, Patricia (June 11, 2010). "Financial Adviser Kenneth Starr Indicted for Fraud by U.S.". Bloomberg Business Week.
- "Ponzi Punk Kenneth Starr Goes to Jail". The Daily Beast.
- “A Holly Golightly For The Stripper-Embezzlement Age.” Jessica Pressler, New York Magazine. September 18, 2011. Pressler therein quotes Scheindlin as saying, “He seemed to have lost his moral compass, partly as a result of infatuation with his young fourth wife.” Learning that she was his fourth wife, NOT his third, startled Passage, also according to Pressler.
- Inmate # 63552-054, Federal Bureau of Prisons, U.S. Department of Justice, at .
- Scott Shifrel (March 15, 2011). "Andrew Stein, ex-city pol who lied during Kenneth Starr Ponzi probe, gets 500 hours of service". The New York Daily News. Retrieved August 31, 2011.
- "Holiday shopping: Tips to find the best deals on Cyber Monday 2010". Daily News (New York).
- Algar, Selim (May 29, 2010). "Alleged celeb swindler Kenneth Starr dumped sickly wife". New York Post.
- Rachel Quigley (July 27, 2011). "Stripper wife of jailed Ponzi schemer Ken Starr filing for divorce". London: Daily Mail. Retrieved August 31, 2011.