The Securities and Exchange Commission today charged a New York City-based financial advisor who has advised celebrity clients including Wesley Snipes and Sylvestor Stallone with running a $30 million investment fraud.

The SEC charged Manhattan-based financial advisor Kenneth Ira Starr with fraud and is seeking an emergency court order to freeze his assets after he allegedly stole client money for his personal use, including the purchase last month of a $7.6 million luxury Manhattan apartment where he and his wife now reside. His wife, Diane Passage, a film producer and philanthropist, also was named as a relief defendant.

A separate but related criminal complaint also was filed by federal prosecutors in the U.S. Attorney's office in Manhattan.

The SEC alleges that Starr and two entities he controls-Starr Investment Advisors LLC (SIA) and Starr & Company LLC (Starrco)-have made unauthorized transfers of money in client accounts that ultimately wound up in Starr's personal accounts. The defendants violated securities laws pertaining to investment advisers in order to perpetrate the scheme, the SEC says.

According to the SEC complaint, Starr and SIA provide investment advisory services to more than 30 high-net-worth clients. In addition, Starr and Starrco provide advisory, accounting, tax preparation, business management, bill paying and "concierge" services to a larger but overlapping group of approximately 175 clients.

The SEC's complaint says Starr and his companies transferred $7 million from the accounts of three clients between April 13 and April 16, 2010, without any authorization. The transferred funds were ultimately used to purchase the luxury apartment on the Upper East Side in Manhattan on April 16. When one of the clients detected the unauthorized transfer and demanded the money be returned, Starr reimbursed that client with money siphoned from the account of another client without authorization. The other two investors have not been reimbursed.

The unauthorized transfers in April 2010 were not the only instances when Starr misappropriated client funds, the SEC says. In August 2009, Starr and his entities began transferring approximately $1.7 million from the personal account of a client and from the account of a charity run by this client. These were all unauthorized transfers. In April 2010, an additional transfer of $750,000 was attempted from an account belonging to this client. But this time, Starr's plans were frustrated because the bank alerted the client, who then halted the transfer, says the SEC. The client then reviewed the account transactions and uncovered the unauthorized $1.7 million transfers in 2009. When confronted about these transactions, Starr gave improbable explanations before eventually reimbursing the client with money that appears to have come from the bank account of another unrelated party, the SEC adds.