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NY judge sets $10M bail for money adviser to stars
Question of the Day
NEW YORK (AP) - A jailed financial adviser to the stars can get out on bail if his two brothers change their minds and put up their houses as collateral, a Manhattan judge ruled Tuesday.
At a brief hearing, U.S. District Judge Shira Scheindlin decided Kenneth Starr could leave jail and be put under house arrest at his Manhattan apartment if he posted a $10 million bond secured by his brothers’ homes and other property.
Prosecutors allege Starr’s Ponzi-like scheme from January 2008 through April cheated elderly and wealthy clients out of $59 million. He’s been behind bars since his arrest in May on securities fraud.
Defense attorney Laura Edwards told the judge that her client’s brothers _ a lawyer and a scientist _ were reluctant to offer their homes. Instead, one agreed to put up his rare book collection valued at $1.7 million to secure a smaller bond.
“These books are like his children,” the lawyer said.
Starr’s wife, Diane Passage, assured the judge her husband wasn’t a flight risk as prosecutors contend. “He’s not going anywhere,” she said.
But the judge wasn’t convinced, and said the houses were needed as well to secure a $10 million bond.
“Either they really believe in the guy or they don’t,” Scheindlin said of the brothers.
Court papers say that Starr diverted investors’ money into risky investments _ or into his own pockets _ without their knowledge. In one instance, he funneled $5.75 million from the account of a 100-year-old heiress to buy a luxury five-bedroom apartment for $7.5 million without her knowledge, according to court filings.
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 wife is a former stripper, is held under the name “Poledance Superstar,” an indictment says. The government is seeking forfeiture of that account and several others.
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