Investment adviser to U.S. celebrities admits fraud

Fri Sep 10, 2010 3:28pm EDT
 
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NEW YORK (Reuters) - An investment adviser, whose clients included director Martin Scorsese and singer Carly Simon, pleaded guilty on Friday to fraud charges as part of a deal with U.S. prosecutors who accused him of swindling up to $50 million.

Kenneth Starr, 66, admitted to committing wire fraud, money laundering and adviser fraud -- three of the 23-counts he was charged with after his arrest in May.

Since his arrest, current and former clients have said they trusted Starr but should have been more suspicious of the lucrative returns he promised. The client list includes wealthy New Yorkers and celebrities such as film director Mike Nichols, actress Uma Thurman, actor Wesley Snipes and photographer Annie Leibovitz.

"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," U.S. attorney for Manhattan Preet Bharara said in a statement.

Starr's wife, Diane Passage, is a former nightclub pole dancer. In a parallel civil case brought by the U.S. Securities and Exchange Commission, Passage was named as a recipient of possibly stolen funds.

Starr is not the same Ken Starr who led the investigation of then President Bill Clinton in the affair over White House intern Monica Lewinsky.

Starr will be sentenced on Dec 15.

(Reporting by Basil Katz; Editing by Christine Kearney and Jill Serjeant)