Steven Hoffenberg

Steven Jude Hoffenberg (January 12, 1945 - August 2022) was an American businessman and convicted fraudster known for orchestrating one of the largest Ponzi schemes in history through his company, Towers Financial Corporation.[1] His audacious financial maneuvers, lavish lifestyle, and associations with figures like Jeffrey Epstein marked him as a controversial presence in New York City's high-stakes business world during the 1980s and 1990s.

Towers Financial Corporation

Hoffenberg founded Towers Financial Corporation in New York City as a legitimate debt collection agency, purchasing outstanding debts from hospitals, banks, and phone companies.[1] The firm expanded aggressively, acquiring insurance companies that Hoffenberg later exploited to siphon funds.[2] Beneath this facade, Towers operated as a massive Ponzi scheme, defrauding investors of between $460 million and $500 million from approximately 200,000 victims nationwide.[2][3]

The scheme unraveled in 1993 when the U.S.

Securities and Exchange Commission (SEC) launched a civil action, leading to Towers' bankruptcy filing with liabilities of $271.6 million against assets of $251.7 million.[1][3] Hoffenberg pleaded guilty in April 1995 to securities fraud, tax evasion, and obstruction of justice, facing up to 25 years in prison.

The SEC described it as "one of the largest Ponzi schemes in history" at the time-a precursor to Bernie Madoff's infamous fraud a decade later.[1][3]

High-Profile Ventures and Associations

Hoffenberg's ambitions extended beyond debt collection.

In January 1993, he briefly owned the New York Post, rescuing it from bankruptcy but presiding over chaos including mass layoffs, staff walkouts, and missed issues amid the Towers scandal.[1] He funded failed corporate raids on Pan Am and Emery Air Freight using Towers as a vehicle, thwarted in part by the 1988 Lockerbie bombing.[1][3]

• Jeffrey Epstein Connection: Introduced in 1987 by arms dealer Douglas Heubert Leese, Epstein worked closely with Hoffenberg, setting up offices in the Villard Houses.

  Hoffenberg later claimed Epstein was the "architect" of the Ponzi scheme, calling him a "genius, criminal mastermind."[1][2] Epstein departed before the collapse and faced no charges.

• Donald Trump Ties: A friend of the future president, Hoffenberg rented an entire floor of Trump Tower and mingled in elite circles.[2]
• Lavish Lifestyle: Private jets, luxury cars, and homes in New York and Florida were financed by defrauded investors.[2]

Towers Financial (Hoffenberg)    ████████████████████  $475M
Madoff (2008)                    ██████████████████████████████████████  $65B
    [Scale approximate; Sources: [1][2][3]]
    

Legal Consequences and Later Life

Sentenced to 18 years in federal prison, Hoffenberg served nearly two decades before release.[2] Post-incarceration, he attempted to assist investigations into Epstein, reiterating claims of his former partner's involvement.[2] Hoffenberg was found dead in his Connecticut apartment in August 2022 at age 77, once described as one of New York's "brashest figures" on the business scene.[2]

"I thought Jeffrey was the best hustler on two feet.

Talent, charisma, genius, criminal mastermind." - Steven Hoffenberg, 2019[2]

Though his fraud devastated thousands, Hoffenberg's story endures as a cautionary tale of unchecked ambition in American finance. His brief media ownership and elite connections add layers to a legacy defined by deception.