The Ponzi fraudster who swindled thousands
Steven Hoffenberg 1945–2022
Steven Hoffenberg earned his infamy twice over. The brash New York financier drew a 20-year prison sentence for masterminding one of the largest Ponzi schemes in U.S. history, swindling thousands of people out of some $460 million. The owner of a debt-collection firm, Towers Financial, Hoffenberg lured investors—many of them retirees and widows on fixed incomes—by posting fantasy profits and promising big returns. Instead, he siphoned millions from the firm to bankroll his glitzy lifestyle, buying a yacht and a fleet of luxury cars and renting an entire floor of Trump Tower. Hoffenberg’s other point of notoriety was his mentoring of Jeffrey Epstein, who was later charged with serial abuse of underage women and hanged himself in jail. Hoffenberg “had unusual charm and a masterful mind,” said his daughter, Haley Hasho, “but didn’t use it fruitfully.”
Hoffenberg was born in Brooklyn, where his father worked in insurance, said The New York Times. He dropped out of City College and became a “bust-out artist,” taking over businesses and using them to buy goods on credit, which he then sold while stiffing his creditors. He founded Towers Financial in 1972, and as his “business grew, his financial machinations became increasingly complex.” He took on Epstein, a former Bear Stearns trader, as a consultant when the “1980s takeover boom was in full swing,” and in 1987 the pair made an ill-fated bid to gain control of Pan Am airlines. They bought two small Illinois insurance companies and raided the accounts, ultimately sending the firms into receivership and leaving thousands of customers with unpaid medical bills. Hoffenberg “made headlines in 1993,” said The Daily Beast, when he rescued the New York Post from bankruptcy. He briefly controlled the tabloid, but his attempt to buy it “was upended when the SEC sued him” and froze his assets.
“It all unraveled quickly in 1994,” said The Washington Post. After pleading guilty to fraud and conspiracy, Hoffenberg spent 18 years in a federal prison. When he emerged, his high-flying days were over; he was found dead in a modest apartment in Derby, Conn., where police said his body sat unnoticed for a week. In later years, he “portrayed himself as pained about the scams” and his involvement with Epstein. “It’s a lifetime of errors,” he said in 2019. “How do you correct a lifetime of errors?”