Legal News

Parties Far Apart On Sentence For Ex-Celebrity Adviser Starr

By Chad Bray

Here we go again.

Prosecutors and a lawyer for a former New York financial adviser accused of misusing funds from his celebrity clients and other investors are far apart on how much time he should spend in jail.

Kenneth Starr, 67 years old, admitted last September to bilking his clients out of tens of millions of dollars, including using client funds to buy a $7.5 million luxury condominium on Manhattan’s Upper East Side last year. He has been jailed since his arrest last May. Click here, here and here for earlier LB coverage of the Starr situation.

Victimized clients include Jim Wiatt, the former chief executive of talent agency William Morris; celebrity jeweler Jacob Arabov; and Rachel Lambert Mellon, the widow of philanthropist Paul Mellon, whose father is industrialist Andrew Mellon. Actress Uma Thurman also was reportedly a victim.

In a court filing late Wednesday, federal prosecutors in Manhattan said  Starr should been sentenced to as much as 12 years, seven months in prison. Prosecutors said Starr criminally exploited the trust clients placed in him “ in order to enrich himself, his family, his friends and his business.”

“In today’s world, people of all walks of life depend on and trust financial advisers like Kenneth Starr to counsel them about how best to protect and provide for their families,” Assistant U.S. Attorney Michael Bosworth said in court documents. “Financial advisers who abuse that trust, who see their clients as bottomless cash accounts and not as fiduciary charges, cannot be treated gently by the criminal justice system.”

In court papers filed earlier this month, his lawyer Flora Edwards asked for a five-year sentence, saying the the statistical probability is low of him living long enough to serve a 10-year sentence. Edwards also cited the impact on his teenaged daughters from a prior marriage, noting his ex-wife is suffering from multiple sclerosis and his daughters have depended on Starr for financial support.

Prosecutors have alleged that Starr used his access to the rich and the famous to “burnish an image of trustworthiness” and tried to create an air of exclusivity. In some cases, he allegedly assumed total control of his clients’ finances, including paying their bills and investing their savings.

At one time, he counted Wesley Snipes, Martin Scorsese and Annie Leibovitz as clients. Sentencing is set for March 2.

Full post as published by Law Blog - WSJ.com on February 24, 2011 (boomark / email).