The Real Deal New York

Ponzi-schemer Kenneth Starr’s UES condo auctioned for $5.63M

By Katherine Clarke and Adam Pincus | February 29, 2012 01:00PM

An Upper East Side triplex formerly owned by Kenneth Starr has been snapped up at auction, for 26 percent less than the convicted Ponzi-schemer and financial advisor to the stars bought it for, Josh Guberman, president and CEO of Core Development Group, which manages the building, told The Real Deal today.

The unit, at 433 East 74th Street, which Starr turned over to the United States government as part of an agreement with the federal government to pay $29 million in restitution, was auctioned off today at the Marriott Courtyard Hotel at 92nd Street and First Avenue. The winning bid was for $5.63 million, made by an individual who said he planned to make it his primary residence, Guberman said.

Starr paid $7.6 million for the property in April 2010, just a month before his arrest for stealing $30 million from celebrity clients like Wesley Snipes, Sylvester Stallone, and Martin Scorsese. Starr is currently serving seven and a half years in federal prison.

About 30 people attended the approximately 10-minute auction which ended at about 11:15 a.m., the source said; there were 11 bidders who each put up $250,000 for the right to bid, Guberman said. Bidding started at $5 million, fell to $3 million when there were no takers, then rose in increments of about $250,000, but then became small as it got to the end. The president of the condominium board of the building, Jonathan Kushner, was one of the bidders, as was Guberman, on behalf of his company, Guberman said. Another attendee was Eli Tabak, principal with the Bluestone Group.

Guberman did not identify the winning bidder, who has three days to sign a purchase contract, and then has 30 days to close. The winning bidder also has to pay about $250,000 as the balance of the 10 percent deposit, within the next 24 to 48 hours.

“We are happy this matter has been amicably resolved,” Guberman said. “We look forward to welcoming the new resident and establishing the apartment as a healthy part of the overall building.”

As previously reported, Starr was found hiding from authorities in the glitzy apartment in May 2010. It has five bedrooms, 6.5 baths and a 1,500-square-foot garden on the main floor, according to information from Streeteasy.com. It also features a 32-foot gunite lap pool with a wet bar and sauna as well as a full-sized media room with surround-sound.

Starr’s wife Diane Passage, a former Scores stripper, had continued to live in the unit since her husband’s $50 million fraud was uncovered, but stopped paying her $7,000-a-month common charges to the building last March, angering the board, according to news reports. It was not immediately clear if she had finally moved out.