Celebrity adviser faces upped fraud charges in NY

FILE - In this file photo taken July 8, 2009, Kenneth Starr attends a media summit in Sun Valley, Idaho. A financial adviser to celebrities, Starr was arrested, Thursday, May 27, 2010, on charges that he carried out a $30 million fraud on his clients. He was charged with wire fraud, investment adviser fraud and money laundering and is awaiting an initial court appearance in federal court in Manhattan. (AP Photo/Nati Harnik, File)

June 10, 2010 7:37:34 PM PDT
The fraud case against a jailed financial adviser to the stars expanded Thursday, with prosecutors listing more elderly entertainment industry figures as victims and nearly doubling their loss to $59 million - a figure expected to climb.

An indictment in federal court in Manhattan alleged additional victims of Kenneth Starr's Ponzi-like scheme include a film producer in his late 70s who lost $4.8 million, a screenwriter in his 80s who lost $8.7 million and an actress in her 80s who lost $100,000. None were named.

Starr, 66, has worked with Wesley Snipes, Sylvester Stallone and Martin Scorsese, though there's no indication they were victims.

Prosecutors had charged Starr last month in a criminal complaint with cheating seven clients out of about $30 million. The indictment raised the total to 11 victims.

"In less than two weeks since Kenneth Starr's arrest, this investigation has maintained its velocity," U.S. Attorney Preet Bharara said in a statement. "The scope of the alleged fraud has doubled and is now up to $59 million, and counting."

Starr's original lawyer said Thursday he had withdrawn from the case. It was unclear if the former adviser had a new attorney.

Since January of 2008 Starr diverted investors' money into risky investments - or into his own pockets - without their knowledge, the court papers say. In one instance, he funneled $5.75 million from the account of a 100-year-old heiress to buy a luxury 5-bedroom apartment for $7.5 million without her knowledge, they say.

Prosecutors allege that when clients demanded funds he didn't have, he would use money from other investors to pay them.

One of several bank accounts linked to Starr, who's married to a stripper, is held under the name "Poledance Superstar," the indictment says. The government is seeking forfeiture of that account and several others.

If convicted, Starr faces up to 20 years in prison on multiple counts of wire fraud, securities fraud and money laundering.