A New York-based investment adviser to celebrity clients, including Sylvester Stallone and Ron Howard, has been arrested for orchestrating a massive Ponzi scheme.

According to the New York Times, Kenneth I. Starr has been charged with diverting $30 million of his celebrity clients' money to fund his own extravagant lifestyle.

His client list includes such prominent names as Martin Scorsese, Uma Thurman, Wesley Snipes and Annie Leibovitz. Much like disgraced financier Bernard Madoff, currently serving a prison sentence of more than 150 years for orchestrating a multi-billion dollar scheme, Starr is accused of recruiting celebrity clients by pitching his company as exclusive and aspirational.

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Former New York city council president Andrew Stein is swarmed by media after being arrested in connection to Ken Starr in an alleged investment fraud scheme. ((Brendan McDermid/Reuters))

"Starr had an MO that has become unfortunately familiar in recent times," Manhattan U.S. attorney Preet Bharara was quoted as saying. "He used his access to famous and powerful clients to burnish an image of trustworthiness, inducing them to entrust him with management and control of their financial affairs."

Starr, who is no relation to the special prosecutor of the same name who investigated former U.S. President Bill Clinton during his impeachment proceedings, is charged with fraud and money laundering.

Former New York city council president Andrew J. Stein is also implicated in the scheme, charged with lying to tax authorities and the federal government.

Despite being charged, prosecutors say Stein was unaware of Starr's fraud, even though he used $1.6 million from a company started by Starr to cover extravagant personal expenses, the report said. He is also alleged to have diverted new clients to Starr's company.

It is not known which of Starr's celebrity clients might have had their legitimate investment funds used for Starr's own purposes or diverted to assets he controlled.

Stein was released on a $250,000 bond, but Starr is being held without bail.