05.27.10 3:09 PM ET
How Uma Sniffed Out a Ponzi Scheme
Today’s criminal complaint against financial adviser-to-the-stars Kenneth Starr contains several anonymous clients who were allegedly defrauded by him and his firm. The identity of clients and victims alike has become an instant guessing game in New York and Hollywood.
As reporters scramble around the Manhattan courthouse trying to piece together this fast-moving story, sources familiar with Starr and his clients have filled in some of the blanks: “client number two” in the criminal complaint is an “actress" who marched into Starr’s offices on April 26 demanding to know where $1 million of her money had gone. Within a day, the money had been returned to her, but the feds allege that it was not her money being paid back to her. Rather, it was the money of “client number three”—a former talent agent executive and his wife.”
The actress is none other than Uma Thurman, according to several sources close to her. The talent agent is strongly believed to be Jim Wiatt, the former head of William Morris—and another client of Starr’s firm—according to other entertainment industry insiders, though the Daily Beast could not confirm this.
For months, "the actress" had been suspicious, the newly filed complaint against Starr said. She’d viewed financial statements that she found “confusing.” She’d shown them to a friend with “financial expertise” and the person noticed that that her assets had dropped significantly, but that “no one had notified her.”
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• Allan Dodds Frank: Madoff vs. Starr—Who’s the Real Ponzi King? According to the complaint, when the actress (i.e. Thurman) questioned Starr, he hemmed and hawed. Starr told her he couldn’t reach “associate 4,” the man who he said held the money.
“Starr was asked to contact Associate 4 to have the money returned. Starr returned to the room several times to say that Associate 4 was unreachable.”
Eventually, Thurman was taken to a private conference room, where she called Associate 4’s number. “She was put right through," the complaint says. “She informed Associate 4 that she had a problem because a large portion of her savings was in his account.”
“[Associate 4] replied that he did not know the money belonged to her and that he thought it belonged to Starr. He further said that he got really mad at Starr and told him ‘you bungled me up on this.' He promised to get the money back to her.”
Within hours, he did.
Except that, the money transferred came from client number 3, according to the complaint, a “former executive of a talent agency, and his wife.”
Such stories are likely to begin bubbling up, as the Hollywood community reels from the news that a mini-Madoff was allegedly in their midst. Rumors have been percolating throughout the entertainment industry for months that all was not right with Starr and his firm—the director Mike Nichols pulled out all his money. So had the photographer Annie Leibovitz, who was having money problems and was introduced to a lending firm called Art Capital, via Starr. When her relationship went south, amid critical reports about Art Capital, her relationship with Starr busted up as well.
On Thursday, Leibovitz said, "News of Ken Starr's arrest does not come as a complete surprise to me, and I will follow this story with great interest. Ken Starr no longer represents me and has not for some time."
Jacob Bernstein is a senior reporter at The Daily Beast. He has also written for New York magazine, Paper, and The Huffington Post.