Last week, we complained that it was getting a bit boring out here waiting for long-brewing deals to come to fruition in Hollywood. Never mind: It’s scandal season in Tinseltown! In the past week we’ve had not one but two head-spinning bicoastal arrests in fraud cases that bring back recollections of just how loopy proximity to star power can make people. Or maybe it’s that star power attracts loopy people?
Case one, the duo aptly nicknamed “Bonnie and Yonni.” Bonnie is Bonnie Hoxie, until a week ago an assistant in Walt Disney’s corporate communications department in Burbank, Calif., and a woman with whom I’ve had perfectly pleasant interactions via e-mail or the phone—usually to set up a lunch or some such with her boss, Zenia Mucha. But, not being a hedge fund, I wasn’t among the lucky ones to hear from her supposed boyfriend, Yonnie Sebbag, who gave himself the clever pseudonym Jonathan Cyrus (probably a play on Miley, get it?). Sebbag is accused of contacting 20 or so hedge funds in New York and elsewhere with the hopes of selling them internal documents detailing Disney’s second-quarter 2010 earnings a couple of days before they were to be announced, on May 11.
Sebbag ended up getting paid $15,000 from a couple of FBI agents posing as traders at a hedge fund. Rather than keeping up his facade as Cyrus, Sebbag earnestly spilled the beans about who he was and the fact that the info was coming from his girlfriend. (In hilarious/sad e-mails released by the Securities and Exchange Commission, Hoxie sent her friend links to a Stella McCartney handbag and shoes that she hoped to get from Neiman Marcus once her ship came in.) I don’t know Sebbag, but just by virtue of my minor interactions with Hoxie, if any of these allegations are true, I can’t help but feel bad for her. The stakes here just seemed way too low for her to break a cardinal rule that the hedge fund recipients of the proposal from “Cyrus” heeded well: Don’t mess with the Mouse.
Case two involves the ironically named investment adviser Kenneth Starr (no relation to the Clinton presidency antagonist), who was charged last week with operating a $30 million Ponzi scheme, and, in particular, recently moving $7 million out of his clients’ accounts to help buy an Upper East side triplex for roughly the same amount—which he happens to share with his comely wife, a former peeler at Scores.
His arrest recalls Dana Giacchetto, the hotshot broker to Leonardo DiCaprio, Cameron Diaz and others, who served three years in prison for misappropriating $10 million of his clients’ funds. Apparently, Starr managed money for 30 high-net-worth people, including Uma Thurman and entrepreneur Steve Brill, and also oversaw a “concierge” service that looked after the needs of some 175 celebs. At one time or another, Sylvester Stallone, Wesley Snipes and Al Pacino were among his money management clients, along with photographer Annie Leibovitz, who has blamed Starr for giving her advice that led to her own well-publicized financial troubles. “News of Ken Starr’s arrest does not come as a complete surprise to me, and I will follow this story with great interest,” Liebovitz said in a tart statement.
The case against Starr is in its early stages. But if it holds up, it reveals another truth about the intersection of hubris and criminal behavior: There really is no such thing as deterrence and message sending. If Bernie Madoff and Mark Drier weren’t enough to make people think twice about diverting their clients’ money into a triplex with a lap pool, who is?