Steven Hoffenberg

Steven Jude Hoffenberg is the former founder, Chief Executive Officer, President, and Chairman of Towers Financial Corporation, a debt collection agency, which was later discovered to be a Ponzi scheme.[2] 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 (18 of which he served), plus a $1 million fine and $463 million in restitution. The SEC considered his financial crimes to be "one of the largest Ponzi schemes in history" prior to Bernie Madoff's crimes a decade later.[3]

Steven Jude Hoffenberg
Born1945 (74-75)
Brooklyn, New York
EmployerTowers Financial Corporation
Known forOwner of the New York Post; Ponzi scheme
TitleFounder, Chief Executive Officer, President, and Chairman
Criminal charge(s)Five 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
Criminal statusReleased
Spouse(s)Maria Santiago

Personal life

Hoffenberg was born in Brooklyn, New York.[4][2] He is a born-again Christian.[5] In July 2014, he married Post All Star News President Maria Santiago.[6]

Biography

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][2][10] It was later discovered to be a Ponzi scheme.[8][9][2][10]

In 1987 Hoffenberg hired Jeffrey Epstein to help with the Towers Financial Corporation.[2] Hoffenberg set Epstein up in offices in the Villard Houses.[11] 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.[2] He rescued the New York Post from bankruptcy and briefly owned the paper.

During this period, Hoffenberg and Epstein worked closely together and traveled everywhere on Hoffenberg's private jet.[11][12][13] Hoffenberg began using Towers Financial funds to pay off earlier investors and pay for a lavish lifestyle that included a Locust Valley, Long Island mansion, homes on Sutton Place in Manhattan and in Florida, and a number of cars and planes.[2][14]

In 1993 the Towers Ponzi scheme imploded, in February 1993 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" prior to Bernie Madoff's crimes a decade later.[3] In court documents, Hoffenberg claimed that Epstein was intimately involved in the scheme.[15][16] Epstein left Towers Financial before it collapsed and was never charged for being involved with the massive investor fraud committed.[17][18]

In February 1994 he was arrested, and in 1997 Judge Robert W. Sweet sentenced Hoffenberg to 20 years in prison (he spent 18 years at several prisons, including FCI Fort Dix in 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 Bureau of Prisons he was released in October 2013).[19][5][10][20][2] He settled a civil suit with the U.S. Securities and Exchange Commission for $60 million. Hoffenberg is currently paying back all of the above investors' debt.[21][22]

In July 2019, Hoffenberg claimed that Epstein was his “uncharged co-conspirator” in the Ponzi scheme.[23] Former Towers investors made similar allegations in a lawsuit filed in August 2018. The lawsuit also alleges that the millions in stolen investments were the seed capital for Epstein's hedge fund, which it values at $50 billion.[24]

References
  1. "Hoffenberg Pleads Guilty in Massive Securities Fraud: Crime: Financier could face a 25-year sentence. Investors were bilked of $500 million."
  2. Ward, Vicky (2011-06-27). "The Talented Mr. Epstein". Vanity Fair. Retrieved 2020-06-10.
  3. "Arrest of Steven Hoffenberg Announced in New York" (PDF). SEC News Digest. February 18, 1994. p. 2. Retrieved March 13, 2009.
  4. Mediaweek. 2010-11-02. Retrieved 2020-06-10.
  5. "Businessman Steven J. Hoffenberg To Once Again Publish The New York Post Publishing Inc". Newswire. Retrieved 2020-06-10.
  6. "Steven J. Hoffenberg Weds Maria Santiago In Front Of Trump Tower". Blacktiemagazine.com. 2014-07-10. Retrieved 2020-06-10.
  7. "Averting a Crisis p. – Newspaper & News Publishing Industry News". Editor & Publisher Magazine. 2011-05-04. Retrieved 2020-06-10.
  8. http://www.towersinvestors.com/wp-content/uploads/2010/12/towers-collection.pdf
  9. "Hoffenberg v. Hoffman & Pollok, 248 F. Supp. 2d 303 (S.D.N.Y. 2003)"
  10. https://www.govinfo.gov/content/pkg/USCOURTS-njd-1_10-cv-02788/pdf/USCOURTS-njd-1_10-cv-02788-0.pdf
  11. Ward, Vicky (June 27, 2011). "The Talented Mr. Epstein". Vanity Fair. New York City: Condé Nast. Archived from the original on June 12, 2015. Retrieved June 11, 2015.
  12. 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. Retrieved July 12, 2019.
  13. 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. Retrieved July 11, 2019.
  15. "Towers Ponzi Scheme Complaint" (PDF).
  16. Briquelet, Kate; Connor, Tracy (July 15, 2019). "Ponzi Scheme Victims Say Epstein Swindled Them". The Daily Beast. Retrieved July 16, 2019.
  19. "United States v. Hoffenberg, 1:94-cr-00213 –". Courtlistener.com. Retrieved 2020-06-10.
  20. https://www.govinfo.gov/content/pkg/USCOURTS-ca3-12-03283/pdf/USCOURTS-ca3-12-03283-0.pdf
  21. Frank, Robert (March 13, 2009). "From Ponzi to Madoff". The Wall Street Journal. Retrieved March 13, 2009.
  22. Eaton, Leslie (March 8, 1997). "Hoffenberg Gets 20-Year Sentence in Fraud Case". The New York Times. Retrieved March 13, 2009.
  23. Briquelet, Kate; Conner, Tracy (July 14, 2019). "Ponzi Scheme Victims Say Epstein Swindled Them". Daily Beast.
  24. "Jeffrey Epstein's ex-mentor accuses him of fraud". Quartz. 1995-04-21. Retrieved 2020-06-10.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.