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Steven Hoffenberg, Jeffrey Epstein’s former mentor, has died

Steven Hoffenberg, sentenced to 20 years in prison for a Ponzi scheme and former mentor of Jeffrey Epstein, was found dead in his home. He was 77 years old.

From the New York social scene to a decrepit building, via prison. The police of Derby (Connecticut) discovered Tuesday the lifeless body of a man presented as Steven Hoffenberg, a former star financier of New York, mentor of Jeffrey Epstein, fallen into disgrace after the revelation of a scam that he had developed, a Ponzi pyramid to nearly half a billion dollars for which he was sentenced to 20 years in prison. The causes of his death are not yet determined, but the body of the 77-year-old man, who had just contracted Covid-19, shows no signs of violence. The body found on the floor of the bedroom has not been formally identified, due to the advanced state of decomposition, but all evidence suggests that it is indeed the native of Brooklyn.

The alert was given by Maria Farmer, a friend of the septuagenarian worried about not having heard from him for several days. According to his confidences to the Daily Beast, the years spent in prison have changed Steven Hoffenberg. Before his release in 2013, the man became a born again Christian, a term used by evangelists to refer to the "new birth" of some believers. "The world lost a true gentleman with a big heart and a loving spirit. He was so loyal. He was always there," the painter assured the American media. "I became his family and he became mine."

In the 1980s, Steven Hoffenberg was a small star of the New York social scene. Tenant of an entire floor of Trump Tower – he briefly supported Donald Trump during the 2016 campaign – he had even tried to buy the New York Post in great difficulty, before the editorial staff turned against the one it had once called "white knight."

462 million embezzled… and disappeared

After several investigations, Steven Hoffenberg pleaded guilty in 1995 and received a 20-year prison sentence, served from 1997 to 2013, for orchestrating one of the biggest pyramid schemes in the country's history: like Bernard Madoff after him, he baited clients by promising them a high return, then used the investment of one to pay back the other. Some $462.5 million of the embezzled money was used to keep the businessman in the black through his company Towers Financial. He was fined one million dollars and ordered to return the half billion dollars stolen, but the money disappeared. A tragedy for his victims, some of whom had entrusted him with a large part of their salary in anticipation of their retirement: "My current financial condition means that I will have to continue to work to survive… I worked nights, I didn't spend much time with my family. I thought I would have more time when I retired, but apparently not," Anthony Mattos, a California foreman, told the New York Times. In total, he lost the $160,000 he invested in Steven Hoffenberg's fraudulent business.

Eloise L. Eaton, one of the victims of the scam living in Arizona, was able to recover only $1,100 of the $213,000 entrusted to Towers Financial Corp, not enough to pay for the care her husband, who has Alzheimer's disease, needs. "The money invested represents 15 years of savings for the single mother with three children that I am… Mr. Hoffenberg truly represents the evil from which we are trying to protect our children,"  Sharon Dauenhauer had agreed. "I hope Steven Hoffenberg receives the maximum sentence. Our investment was to be used to renovate our home. The loss of this money has led to the end of our 13-year marriage," concluded Gail Peterson.

Hoffenberg and Epstein, "smart and obsessed with money"

According to his friend Maria Farmer, who was the first woman to file a complaint against Jeffrey Epstein in 1996, Steven Hoffenberg had expressed many regrets about his proximity to the fallen financier. In 2003, Vanity Fair reported on the meeting between the two financiers in London in the 1980s, introduced by a mutual friend, the arms dealer Douglas Leese: "Hoffenberg and Epstein had so many similarities. Both were smart and obsessed with money. Both were from Brooklyn. [In 1987, Steven Hoffenberg hired Jeffrey Epstein, paying him $25,000 a month for a consulting assignment. "They traveled all over the world, always together on Hoffenberg's plane," a source recounted.

The two men worked together on a number of questionable schemes that led to Steven Hoffenberg testifying before a grand jury in Illinois in 1993. Hoffenberg described Epstein as a "technician", although he had no training as a stockbroker, who advised him in his financial arrangements. They blamed each other for the failure of the 1987 and 1988 takeovers of Pan American World Airways and Emery Air Freight Corp. "Epstein was in charge of the transactions," Hoffenberg said at the time, swearing that Jeffrey Epstein planned to embezzle $3 million from the insurance companies to buy stock in the airlines.

"Jeffrey was the best hustler alive"

Since his release from prison, and the multiplication of accusations against his former protégé, Steven Hoffenberg had presented Jeffrey Epstein as an active accomplice in his Ponzi scheme. The vast fortune of Jeffrey Epstein, thanks to which he had developed a network of sexual abuse of young girls, sometimes underage, would have been built on the fruits of the scam for which Steven Hoffenberg spent 18 years behind bars. "He was my colleague, seven days a week," Hoffenberg had assured in 2019, in an interview with Quartz. "When you plead guilty, it doesn't lead to a big investigation," he had explained to justify the fact that his former partner was never worried by the justice system about this Ponzi scheme. Epstein allegedly "knowingly and intentionally used the funds he embezzled and obtained from this Ponzi scheme for his personal use and the funding of a luxurious lifestyle," the victims of the scam charged in a complaint filed in August 2018 but withdrawn two months later.

"Jeffrey was the best scammer alive. The talent, the charisma, the genius, the criminal mind. We'd found something that would make us a lot of money," Steven Hoffenberg recalled to the Washington Post in 2019, shortly after the suicide of his former protégé, whom he introduced as his "closest friend for years"… the years of his scam. 

 

Written by Michael Zippo

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