Jailed money manager Kenneth Starr’s wife may be forced back to working the pole.
An SEC lawyer said this morning that federal regulators will oppose any attempt to unfreeze Starr’s crooked assets to support his ex-stripper wife, Diane Passage, and her 12-year-old son Jordan.
“Ms. Passage would not be the first spouse of a fraudster to be harmed by their spouse, but unfortunately our priority is the investors,” Todd Brody said.
Meanwhile, the couple got more bad news late this afternoon when prosecutors handed up a 23-count indictment against Starr that nearly doubled the amount he’s charged with swindled from his well-heeled clients to $59 million.
READ THE STARR INDICTMENT (PDF)
READ THE RELEASE FROM THE US ATTORNEY (PDF)
The Manhattan federal court filing also added four victims to the list of celebrities and millionaires taken in by his alleged Ponzi scheme.
None are identified by name, but the indictment says they are a “film producer and businessman” in his late 70s, a “playwright and screenwriter” in his 80s, “the ex-wife of a wealthy investor and businessman” and a actress in her 80s.
Starr defrauded or tried to defraud each out of between $100,000 and $8.7 million, the indictment says.
“In the less than two weeks since Kenneth Starr’s arrest, this investigation has maintained its velocity,” said Manhattan U.S. Attorney Preet Bharara, who noted that the probe was continuing.
Starr’s court-appointed lawyer is out of her office until Monday and didn’t immediately return a call for comment.
His wife, a former Scores dancer, came to court this morning wearing black patent leather high heels, a black dress and a pink Vivienne Westwood cardigan.
She declined to comment on the SEC’s stance regarding her living expenses, but her lawyer said “Ms. Passage is going to do what she has to do to support herself and her son.”
High-powered Washington, D.C., defense lawyer Abbe Lowell — who represented then-President Clinton during his impeachment proceedings — also said the feds “couldn’t be that heartless.”
“I don’t think it’s a matter of being heartless,” shot back lawyer Aurora Cassirer, who’s been put in charge of Starr’s celebrity-servicing financial advisory firm.
“I don’t think the SEC and the federal government want Ms. Passage and her son to starve. They may say that, but I don’t think they mean that,” Lowell said.
Lowell said he wasn’t being paid to appear in Manhattan federal court on behalf of Passage and Starr, who was’t present.
He told Judge Sidney Stein that he was representing the couple on an interim basis while they make arrangement to hire him or another lawyer.
Starr and Passage are being sued by the SEC in connection with Starr’s alleged $30 million Ponzi scheme, whose victims included actress Uma Thurman and heiress Rachel “Bunny” Mellon.
Lowell told the judge that Passage was working to provide the SEC with the financial information it’s seeking, but that “as to Mr. Starr, it might be more complex, since there are rights he has to consider given the predicament he’s in.”
Starr has been locked up since federal agents found him hiding in a closet inside his luxury, $7.6 million Upper East Side condo on May 27.
Lowell said Starr had yet to find anyone to replace the public defender he was given after his first lawyer abandoned the case over an unspecified conflict of interest.