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Steven Hoffenberg

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Steven Hoffenberg
Steven Hoffenberg in 1962
Born(1945-01-12)January 12, 1945
Brooklyn, New York City, U.S.
DiedAugust 2022(2022-08-00) (aged 77)
Derby, Connecticut, U.S.
Body discoveredAugust 23, 2022
EmployerTowers Financial Corporation
Known forOwner of the New York Post (1993), Ponzi scheme at Towers Financial Corporation, Jeffrey Epstein associate
Criminal chargesFive counts of securities fraud, tax evasion, and obstruction of a Securities and Exchange Commission inquiry[1]
Criminal penalty20 years imprisonment and fine; served 18 years
Spouses
  • Bailey Edgren (m. 1963)
    Second wife
Maria Santiago
​
(m. 2014)​
Children1

Steven Jude Hoffenberg (January 12, 1945 – August 2022)[2] was an American businessman and fraudster. He was the founder, CEO, president, and chairman of Towers Financial Corporation, a debt collection agency, which was later discovered to be a Ponzi scheme.[3] In 1993, he rescued the New York Post from bankruptcy, and briefly owned the paper. Towers Financial collapsed in 1993, and in 1995 Hoffenberg pleaded guilty to bilking investors out of $475 million. He was sentenced to 20 years in prison (serving 18 years), plus a $1 million fine and $463 million in restitution. The U.S. SEC considered his financial crimes to be "one of the largest Ponzi schemes in history".[4]

Early life and career

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Hoffenberg was born in Brooklyn, New York to a Jewish family on January 12, 1945, along with a twin brother, Martin.[2][5]

In 1971 Hoffensberg pleaded guilty to attempted second-degree larceny for trying a steal a diamond in New York. Despite initially denying reports he had indicating his involvement but at his trial, he admitted he was once "involved in a theft".[6]

Hoffenberg owned the New York Post from January to March 1993. The Towers Ponzi scheme quickly imploded, ending his tenure, which had seen mass layoffs, a mass walkout on the part of the paper's staff, and missed publications.

Towers financial corporation

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In the early 1970s, Hoffenberg founded Towers Financial Corporation, a New York City debt collection agency that was supposed to buy debts that people owed to hospitals, banks, and phone companies.[7] He was its chief executive officer, president, and chairman.[8][9][3][10] It was later discovered to be a Ponzi scheme.[8][9][3][10] In February the Securities and Exchange Commission began a civil action against him and others, and in March 1993 Towers Financial filed for bankruptcy.[9] In April 1995 Hoffenberg pleaded guilty to bilking investors out of $475 million.[9] The SEC considered his financial crimes as "one of the largest Ponzi schemes in history" at the time.[4]

Prison sentence

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In 1997, Judge Robert W. Sweet sentenced Hoffenberg to 20 years in prison. He spent 18 years at several prisons, including FCI Fort Dix (Fort Dix, New Jersey) and the Federal Medical Center, Devens (in Devens, Massachusetts), plus a $1 million fine and $463 million in restitution. Per the U.S. Bureau of Prisons, he was released in October 2013.[11][10][12][3] He settled a civil suit with the U.S. Securities and Exchange Commission for $60 million.[13][14]

Relationship with Jeffrey Epstein

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In 1987, he met Jeffrey Epstein through a British defense contractor named Douglas Leese (died 2011), who Hoffenberg claimed was an arms dealer.[15] Leese was, with Saudi Adnan Khashoggi and Prince Bandar bin Sultan Al Saud, architect in the billion dollar Al-Yamamah arms deal, Britain's biggest arms deal ever concluded – earning the prime contractor, BAE Systems, at least £43 billion in revenue between 1985 and 2007.[16] Leese told Hoffenberg about Epstein: "The guy's a genius, he's great at selling securities. And he has no moral compass." Hoffenberg hired Epstein about 1987 and 1993 to help with the Towers Financial Corporation, paid him $25,000 a month and gave him a $2 million loan in 1988 that Epstein would never have to pay back.[17][3]

Hoffenberg set Epstein up in offices in the Villard Houses.[3] They unsuccessfully tried to take over Pan Am in a corporate raid with Towers Financial as their raiding vessel. Their bid failed, in part because of the 1988 terrorist bombing of Pan Am Flight 103 over Lockerbie, which ultimately contributed to the airline's bankruptcy. A similar unsuccessful bid in 1988 was made to take over Emery Air Freight Corp.[3]

During this period, Hoffenberg and Epstein worked closely together and traveled everywhere on Hoffenberg's private jet.[3][18][19] Hoffenberg began using Towers Financial funds to pay off earlier investors and pay for a lavish lifestyle that included a Locust Valley, New York, Long Island mansion, as well as homes on Sutton Place (in Manhattan) and in Florida, and a number of cars and planes.[3][20]

In court documents, Hoffenberg claimed that Epstein was intimately involved in the Ponzi scheme.[21][22] Epstein left Towers Financial before it collapsed and was never charged for being involved with the massive investor fraud committed.[23][24]

In 2016, Hoffenberg and some of his victims sued Epstein, seeking restitution. He asserted in court that Epstein had been intimately involved in Tower's financial practices and called Epstein the "architect of the scam".[17] In July 2019, following Epstein's arrest on charges of sex trafficking of minors and conspiracy to commit sex trafficking, Hoffenberg again claimed that Epstein was his "uncharged co-conspirator" in the Ponzi scheme.[25] Former Towers investors made similar allegations in a lawsuit filed in August 2018. The lawsuit also alleged that the millions in stolen investments were the seed capital for Epstein's hedge fund, which it valued at $50 billion.[26]

Personal life and death

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On July 10, 2014, he married Post All Star News president, Maria Santiago, after a one month romance. The ceremony was held in front of[clarification needed] Trump Tower in Manhattan.[27] He was married twice before, and had a daughter.[5]

Hoffenberg was found dead at his apartment in Derby, Connecticut, on August 23, 2022, at the age of 77.[2] Epstein accuser Maria Farmer said she called police to check in on Hoffenberg after she failed to reach him over the phone during the preceding week.[28] His body was in an advanced state of decomposition, and a Derby police officer estimated that he had been dead for roughly a week by the time his remains were found.[2][5] An initial autopsy found no evidence of trauma on his body and police said they believe he died of natural causes. He had tested positive for COVID-19 not long before his death.[28]

References

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  1. ^ "Hoffenberg Pleads Guilty in Massive Securities Fraud: Crime: Financier could face a 25-year sentence. Investors were bilked of $500 million." Archived November 11, 2020, at the Wayback Machine Los Angeles Times.
  2. ^ a b c d "Steven Hoffenberg, who worked with Jeffrey Epstein, found dead". BNO News. August 25, 2022. Archived from the original on August 25, 2022. Retrieved August 25, 2022.
  3. ^ a b c d e f g h i Ward, Vicky (June 27, 2011). "The Talented Mr. Epstein". Vanity Fair. Archived from the original on June 12, 2015. Retrieved June 11, 2015.
  4. ^ a b "Arrest of Steven Hoffenberg Announced in New York" (PDF). SEC News Digest. February 18, 1994. p. 2. Archived (PDF) from the original on March 20, 2009. Retrieved March 13, 2009.
  5. ^ a b c Shanahan, Ed (August 26, 2022). "Steven Hoffenberg, Debt Baron Who Ran a Vast Fraud, Dies at 77". The New York Times. Archived from the original on August 26, 2022. Retrieved August 26, 2022.
  6. ^ "Steven Hoffenberg, brash swindler behind massive Ponzi scheme, dies at 77". Washington Post. ISSN 0190-8286. Retrieved September 17, 2022.
  7. ^ "Averting a Crisis p. – Newspaper & News Publishing Industry News". Editor & Publisher Magazine. May 4, 2011. Archived from the original on June 9, 2020. Retrieved June 10, 2020.
  8. ^ a b "Re: Guaranteed Collection Corporation's Joint Venture With Some Three Hundred (300) Small Collection Agencies" (PDF). Archived from the original (PDF) on June 9, 2020.
  9. ^ a b c d "Hoffenberg v. Hoffman & Pollok, 248 F. Supp. 2d 303 (S.D.N.Y. 2003)". Justia Law. Archived from the original on June 9, 2020. Retrieved June 9, 2020.
  10. ^ a b c Steven Jude Hoffenberg v. United States Of America (D.N.J. February 6, 2012), Text.
  11. ^ "United States v. Hoffenberg, 1:94-cr-00213 –". Courtlistener.com. Archived from the original on June 9, 2020. Retrieved June 10, 2020.
  12. ^ Steven Jude Hoffenberg v. United States of America (3d Cir. November 15, 2012), Text.
  13. ^ Frank, Robert (March 13, 2009). "From Ponzi to Madoff". The Wall Street Journal. Archived from the original on January 9, 2015. Retrieved March 13, 2009.
  14. ^ Eaton, Leslie (March 8, 1997). "Hoffenberg Gets 20-Year Sentence in Fraud Case". The New York Times. Archived from the original on February 13, 2010. Retrieved March 13, 2009.
  15. ^ Was Jeffrey Epstein a spy? Archived August 12, 2022, at the Wayback Machine, Rollingstone.com. Accessed August 27, 2022.
  16. ^ The Al Yamamah Arms Deals Archived March 1, 2021, at the Wayback Machine, Compendium of Arms Trade Corruption, Tufts University 2021
  17. ^ a b Marc Fisher, Jonathan O'Connell: "Final evasion: For 30 years, prosecutors and victims tried to hold Jeffrey Epstein to account. At every turn, he slipped away" Archived October 6, 2021, at the Wayback Machine, The Washington Post, August 10, 2019
  18. ^ Cole, Brendan (July 9, 2019). "Jeffrey Epstein's mentor says his former protege was ruined by relationship with Bill Clinton: 'It inflated his ego'". Newsweek. Archived from the original on July 12, 2019. Retrieved July 12, 2019.
  19. ^ Stewart, James B.; Goldstein, Matthew; Kelly, Kate; Enrich, David (July 10, 2019). "Jeffrey Epstein's Fortune May Be More Illusion Than Fact". The New York Times. ISSN 0362-4331. Archived from the original on July 11, 2019. Retrieved July 11, 2019.
  20. ^ Hevesi, Dennis (January 25, 1993). "Post Rescuer Built Wealth from $2,000". The New York Times. Archived from the original on June 11, 2020. Retrieved June 11, 2020.
  21. ^ "Towers Ponzi Scheme Complaint" (PDF). Archived from the original (PDF) on September 14, 2019.
  22. ^ Briquelet, Kate; Connor, Tracy (July 15, 2019). "Ponzi Scheme Victims Say Epstein Swindled Them". The Daily Beast. Archived from the original on July 16, 2019. Retrieved July 16, 2019.
  23. ^ "Jeffrey Epstein worked at financial firm that engaged in massive Ponzi scheme in 1980s and 1990s". CBS News. August 13, 2019. Archived from the original on January 15, 2022. Retrieved June 10, 2020.
  24. ^ Litigation Release No. 15053 / September 17, 1996
    Accounting and Auditing Enforcement Release No. 816     Archived September 10, 2021, at the Wayback Machine, sec. gov, September 17, 1996; accessed August 25, 2022.
  25. ^ Briquelet, Kate; Conner, Tracy (July 14, 2019). "Ponzi Scheme Victims Say Epstein Swindled Them". Daily Beast. Archived from the original on July 16, 2019. Retrieved July 15, 2019.
  26. ^ "Jeffrey Epstein's ex-mentor accuses him of fraud". Quartz. April 21, 1995. Archived from the original on August 30, 2019. Retrieved June 10, 2020.
  27. ^ "Steven J. Hoffenberg Weds Maria Santiago In Front Of Trump Tower". Blacktiemagazine.com. July 10, 2014. Archived from the original on June 9, 2020. Retrieved June 10, 2020.
  28. ^ a b "Epstein's Ponzi Schemer Mentor Found Dead After a Welfare Check". The Daily Beast. August 25, 2022. Archived from the original on August 26, 2022. Retrieved August 25, 2022.
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