07/27/2010 04:33 pm ET Updated 4 days ago

Diane Passage, Kenneth Starr's Wife, Has Money Problems

MANHATTAN FEDERAL COURT -- The former Scores stripper wife and stepson of fallen financial advisor Kenneth Starr are relying on the charity of family and friends to survive, according to court papers filed Monday.

The celebrity life Starr built for himself has fallen to pieces and the "ties to the community have all but been severed," prosecutors say in the papers.

And that's why a judge, prosecutors say, should refuse a motion by Starr's lawyer to have him released on a $2 million bail bond.

Prosecutors allege in the filings that Starr's wife Diane Passage and her adolescent son are living in a leased apartment while their "breadwinner of the family" remains in the Metropolitan Detention Center.

"His businesses are now defunct, most of his friends and family have abandoned him, and he has effectively lost his home," the government argued.
Judge: Kenneth Starr Will Use Public Defender if Assets Stay FrozenFormer celebrity money manager Kenneth Starr. (Associated Press)

But Starr's lawyer Abbe Lowell denied to DNAinfo that Passage had been kicked out of her home.

Starr, 66, has been in federal custody since his May 27 morning arrest at his 433 East 74th Street home, which was purchased with the earnings of his alleged fraud, according to the U.S. Attorney's office.

He is charged with deceiving his wealthy clients -- including Uma Thurman and Jacob the Jeweler -- and constructing a $59 million Ponzi scheme that functioned like Bernard Madoff's.

He was also sued by the Securities and Exchange Commission for civil infractions related to the same fraud.

His assets were frozen, hindering his ability to pay a private attorney, and a court-appointed "permanent receiver" was assigned to take over his companies.

The receiver -- Aurora Cassirer -- recently fired all of the Starr and Company employees, prosecutors said.

Still, they believe Starr might be capable of obtaining the funds to flee if he were to be released during the pendency of his case. They called Starr "a skilled and sophisticated financial operative" who has "structured his assets to evade the detection of law enforcement."

Starr's current lawyer in his criminal case, Flora Edwards, has asked a judge to release Starr to home confinement on a $2 million bond secured by his brothers, Warren and Stuart Starr, and Michael Giordano, a friend.

The parties are set to argue the issue of bail on Tuesday. Two different federal judges denied his requests for bail on the day of his arrest.

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