article

03.02.11

Ponzi Punk Kenneth Starr Goes to Jail

Disgraced celebrity accountant Kenneth Starr faced up to 15 years behind bars but got lucky—he'll serve about five. Jacob Bernstein reports from the courtroom, where Starr's victims spoke out against the light sentence.

In the end, Kenneth Starr caught a break.

Instead of jail time that could easily have run 10 to 15 years for defrauding investors and putting millions of dollars into shell companies, U.S. District Judge Shira Scheindlin on Wednesday opted for leniency, arguing essentially that victims of the disgraced celebrity accountant, such as Uma Thurman, Lauren Bacall, Neil Simon, Denise Rich, and Jim Wiatt, were rich and did not go broke as a result of his fraud scheme.

Scheindlin sentenced Starr to 90 months in prison and three years of supervised release thereafter.

Outside the courtroom, moments later, Starr’s lawyer Flora Edwards explained to the former moneyman’s teenage children that having served nearly a year already, and with 15 percent knocked off, plus an additional six months spent in a halfway house before being fully reintegrated into society, their dad was likely to spend about five more years behind bars.

Edwards was clearly pleased by this, telling reporters, “The sentence could have been much, much worse.”

Starr spoke of having “lost his moral compass” and said he was “extremely sorry” about the more than $30 million that went missing from the coffers of his clients.

Starr,  67, showed up for his big day wearing a navy blue prison jumpsuit and looking glum. But as Scheindlin talked about how the minimum-sentencing guidelines needn’t be adhered to, his head began cantilevering upward, two fingers resting on his chin.

Meanwhile, his current wife, 34-year-old former pole dancer Diane Passage, showed up wearing a tight sleeveless thing that looked like a tank top and showed off her tattoos.

She looked perfectly sanguine at the beginning. Then, as the judge talked of “restitution” and noted that Passage would have to move out of the cushy apartment that Starr stole money to buy for her, she looked more and more depressed.

Soon after, her husband delivered a speech to the court, in which he spoke of having “lost his moral compass.” He said that he was “extremely sorry” about the more than $30 million that went missing from the coffers of his clients, but added that he was “proud” to be part of a country that believed in second chances and hoped one would be afforded to him. He also apologized to his family, whom he said he let down.

One thing that seemed to sway the judge was Starr’s work with various museums and cultural institutions; Scheindlin said his experience with organizations like the Museum of Modern Art was an indication that he had been a good citizen, a remark that triggered guffaws in the pews and among friends of the victims, who argued that Starr’s favored charities are known for having big gala benefits, providing a perfect setting in which to social climb and fish for more very rich, very famous people to defraud.

After the sentencing was completed, Jane Stanton Hitchcock, one of Starr’s victims, walked up to Edwards to congratulate her on her handling of the case and to say she thought the sentence was too lenient.

Hitchcock was trailed by a group of friends, who included the bestselling crime novelist and former prosector Linda Fairstein.

All seemed disappointed by the result.

“I’m stunned that there was such a greater history [of fraud] than was addressed here,” Fairstein said, adding that she was also surprised the prosecutor did not stand up to the judge and the defense when it was argued that Starr’s is not a “ Bernie Madoff-type case” and therefore not as serious.

“Thirty-three million dollars is a lot of money,” she said.

Said another friend, “The judge seemed to be implying that there are two sets of guidelines, one for stealing from people with money and another for stealing from people who don’t. It’s appalling.”

Hitchcock was slightly more in the middle about the whole thing. “I’m a little sorry the sentence wasn’t in the guidelines, but I’m pleased Kenneth Starr soon will not exist in my life at all,” she said.

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Jacob Bernstein is a senior reporter at The Daily Beast. He has also written for New York magazine, Paper, and The Huffington Post.