A financial adviser to celebrities was arrested on Thursday on charges he carried out a $30 million ponzi scheme on some of his clients, according to the U.S. attorney’s office.

Kenneth Starr, 66, was charged with money laundering, investment adviser fraud and wire fraud. He was ordered held without bail until a June 10th pretrial hearing despite a vigorous appeal to the federal Magistrate Court by both Starr and his attorney.

Attorney Josh Klein argued that his client was terrified when federal agents came to arrest him early Thursday morning, portraying Starr as a family man who had strong New York ties and did not pose a flight risk.

But prosecutors painted a different picture, telling the court that Starr attempted to evade arrest by hiding from federal agents. Prosecutors say Starr’s wife told agents he wasn’t home and when they encountered his 12 year old son at the top of the stairs, he, too, said his father was not home. But, prosecutors said, the agents found Starr ” cowering in a closet. ”

Andrew Stein, the former president of the New York City Council who was alleged to have been a recipient of some of Starr’s schemes, was also arrested Thursday morning. He was charged with making false statements to the Internal Revenue Service and federal officers. Stein was released on a $250,000 co-signed bond and ordered back to court June 28.

Starr, an attorney, is head of New York-based Starr and Co. and Starr Investment Advisors LLC, an asset management and financial planning company for high net-worth and celebrity clients.

source: http://www.cnn.com/2010/CRIME/05/27/new.york.celebrity.adviser.arrested/