Former Attorney Sentenced In Manhattan Federal Court For Laundering Nearly $19 Million In Connection With Financial Adviser Kenneth Starr’s Fraud
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JONATHAN BRISTOL, a former attorney, was sentenced today to time served for his role in laundering nearly $19 million of proceeds from the frauds perpetrated by financial adviser Kenneth Starr. BRISTOL pled guilty in May 2011 to one count of money laundering conspiracy in connection with the scheme, and he was sentenced today by U.S. District Judge Deborah A. Batts.
According to the superseding Information, the sentencing submissions, and statements made in public proceedings, including BRISTOL’s guilty plea:
Kenneth Starr was the owner and president of Starr & Company, LLC, which purported to be in the business of managing the assets of, and providing financial planning advice to, high net-worth and celebrity clients. Starr & Company, LLC, also owned and controlled a related entity, Starr Investment Advisers, LLC (collectively, the "Starr Entities"). Between 2005 and 2010, Starr participated in fraudulent schemes that involved more than $33 million in actual or intended losses, and, in his role as investment adviser, made material misstatements and omissions in an effort to fraudulently induce his clients to make certain investments. Between March 2009 and April 2010, Starr stole millions of dollars from his clients by directing unauthorized transfers of funds from his clients' accounts to one of two attorney escrow accounts, and by causing funds to be transferred from the attorney escrow account for his benefit.
BRISTOL, a former attorney, who was licensed to practice in New York and New Jersey, was a partner at a prominent law firm in New York City from November 2008 through May 2010. BRISTOL helped Starr defraud his clients and concealed Starr’s criminal conduct by using two separate attorney trust accounts that were under his control to launder Starr’s defrauded funds.
Among the money laundering transactions BRISTOL conspired with Starr to conduct were:
- In 2009 and 2010, BRISTOL regularly used his escrow accounts to receive funds belonging to Starr clients and then transferred the monies directly to Starr & Co. to pay the company's operating expenses.
- In or about January 2010, BRISTOL used the escrow accounts to receive Starr client funds and then transferred those funds to pay a settlement with another former, disgruntled Starr client.
- In April 2010, BRISTOL used his escrow accounts to help Starr steal over $7 million in client funds and purchase a five-bedroom, 6.5 bathroom luxury condominium.
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In addition to time served, Judge Batts sentenced BRISTOL, 55, to three years of supervised release, and a $100 special assessment fee. BRISTOL was also ordered to pay restitution in the amount of $18,860,282.69.
In September 2010, Starr pled guilty in Manhattan federal court to wire fraud, money laundering, and investment adviser fraud. He was sentenced in May 2011 to 90 months in prison by U.S. District Judge Shira A. Scheindlin, and was ordered Starr to pay $29,112,782.69 in restitution.
Mr. Bharara praised the investigative work of the IRS and the U.S. Securities and Exchange Commission. Mr. Bharara also thanked the New York County District Attorney’s Office for its support for and participation in the investigation.
Assistant U.S. Attorneys Michael Bosworth and Michael Lockard of the U.S. Attorney's Office for the Southern District of New York are in charge of the prosecution. Assistant District Attorneys Michael Kitsis and Hope Korenstein, of the New York County District Attorney's Office, also provided invaluable support and assistance to the investigation. The case is being supervised by the Office’s Public Corruption Unit.