(Bloomberg) Kenneth Starr, a former Manhattan money manager who handled a roster of celebrities, pleaded guilty to defrauding his clients out of as much as $50 million.
"From 2009 to 2010, instead of using my clients' money as I promised, I knowingly used a portion of the money for my own purposes," Starr, 66, told U.S. Magistrate Theodore Katz today in federal court in New York.
Starr, who was arrested in May and charged with 23 criminal counts, pleaded guilty to one count each of wire fraud, investment advisor fraud and money laundering.
Katz said he will recommend that U.S. District Judge Shira Scheindlin accept Starr's plea. Prosecutors and Starr's attorney, Flora Edwards, agreed that sentencing guidelines call for him to serve between 121 and 151 months in prison. Scheindlin may ignore those guidelines when she sentences Starr on Dec. 15.
"He has committed a horrible error in judgment, but that's not the sum total of the man's life," Edwards said outside court.
Starr, whose celebrity clients included Sylvester Stallone and Wesley Snipes, was originally accused of defrauding at least 11 of them, including heiress Rachel "Bunny" Mellon, out of $59 million. Edwards and the government agreed, for sentencing purposes, that the amount lost in the fraud was between $20 million and $50 million.
Manhattan ApartmentAs part of his agreement with the government, Starr will forfeit his $7.5 million apartment on Manhattan's Upper East Side. Scheindlin will determine how much Starr must pay in forfeiture and restitution, up to a total of $50 million, according to the agreement.
"Today's guilty plea replaces Starr's trickery with an admission of guilt," Manhattan U.S. Attorney Preet Bharara said in a statement today.
In July, Starr was granted $10 million bail. He remained in custody, unable to meet the conditions set by the court. Edwards said today she hopes Starr will be able to post bail before he is sentenced.
The case is U.S. v. Starr, 1:10-cr-520, U.S. District Court, Southern District of New York (Manhattan).