HOLLYWOOD—On Friday, September 10, famed financial adviser Kenneth Starr pleaded guilty to charges of fraud in a New York City courtroom.  Starr, whose celebrity clientele includes many members of the Hollywood elite, faces charges including money laundering, wire fraud and investment fraud.

The charges were brought against Starr back in May. According to the press release, “Starr defrauded many of his clients through at least two types of schemes.” In the first, Starr would invest clients’ money in what he sold to them as low risk investments or “sure deals.” He would then transfer their money into his personal accounts, or into other riskier investments in which he held a personal stake.  In the second instance, Starr “exercised direct control over the personal bank accounts of his clients” and would directly transfer their money into his account or those of his associates.  When clients would become suspicious, he would transfer money between accounts to try to compensate.  His methods were reflective of a “Ponzi” scheme, a crime that gained wide notoriety last year when Bernard Madoff pleaded guilty and admitted defrauding investors (including some high-profile individuals) of billions of dollars in such a scheme.

On September 10, Starr admitted to appropriating funds belonging to his clients for his own personal use.  He used the money to pay for a legal settlement with a former client and to fund his lavish lifestyle.  He had recently purchased a multi-million dollar apartment on New York City’s upper east side, which he has forfeited since his arrest.

Over the years, Starr’s clients have included many Hollywood hotshots such as Barbara Walters, Uma Thurman, Warren Beatty and Al Pacino.  In 2002, Sylvester Stallone accused Starr of mismanagement and brought a suit against him.  Other clients, including Diane Sawyer, have also questioned Starr’s techniques and ended their relationship with him as a result.

The total money stolen between 2009 and 2010 is between $20 million and $50 million.  Starr faces a maximum sentence of 45 years and will have to pay financial restitution for the money taken. His sentencing hearing has been set for December 15.  If you believe you may have been a victim of these crimes, please contact Wendy Olsen-Clancy at the New York State’s Attorney’s Office at 866-874-8900.