MANHATTAN (CN) - Financial adviser Kenneth Starr was charged Thursday with 20 counts of wire fraud, and three additional counts of securities fraud, investment adviser fraud and money laundering, in what federal prosecutors describe as a $59 million Ponzi scheme. Starr, 66, whose company Starr & Co., catered to rich people and celebrities, is not the attorney whose report led to the impeachment of President Bill Clinton.
"Starr used the authority with which his clients' entrusted him to defraud or attempt to defraud at least 11 victims of approximately $59 million," the U.S. Attorney's Office said in a statement announcing the indictment.
"He defrauded his clients in two ways," the office said. "First, Starr used his authority over the personal bank accounts of his clients to steal client monies for his own use. He concealed the true nature of these transfers from his clients by passing the money through bank accounts belonging to attorneys and a shell corporation. Second, on some occasions, Starr solicited money from his clients to invest in what he purported to be sure deals, and then diverted all or some of the investment monies to himself and to risky, illiquid investments in which he, his wife, and/or his close associates often held undisclosed financial interests.
"When Starr's clients made demands for payments that Starr could not meet, he transferred funds from one client to another client in conduct that was characteristic of a Ponzi scheme."
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