Jeffrey Epstein's Former Business Associate: I Want To Assist Victims

Aug 14, 2019
Originally published on August 22, 2019 6:04 pm

At 74, Steven Hoffenberg spends a lot of time reflecting on his long and checkered past, which included a lengthy prison sentence for running a Ponzi scheme.

Since last weekend, he says his thoughts have increasingly turned to the man he says conspired with him in that scheme — the notorious sex criminal Jeffrey Epstein, who was found dead in his cell at New York's Metropolitan Correctional Center last Saturday.

"There's so much going through my mind about me and Epstein. It's a lifetime of errors. How do you correct a lifetime of errors?" Hoffenberg asks. He spoke to NPR from a hospital bed, where he was awaiting surgery.

Epstein is widely seen as someone who managed to dodge accountability for his actions. His 2006 arrest for sex crimes involving under-aged girls in Florida resulted in a plea deal that was widely seen as very lenient. Hoffenberg maintains that Epstein also got away with financial crimes.

During his lifetime, Epstein was known as a man who lived a life of opulence. He threw lavish parties for his rich and powerful friends at his many homes, which included one of the largest mansions in Manhattan and a private island in the Virgin Islands, where he ferried his friends on a private jet.

Hoffenberg says he was introduced to Epstein by a British business acquaintance in the 1980s, and they quickly became friends.

"He appeared to be brilliant, extraordinarily gifted and talented in convincing people to buy from him. And a criminal mastermind," Hoffenberg says.

Hoffenberg hired him at the financial company he ran, Towers Financial. Epstein had a vast network of wealthy connections and helped Hoffenberg raise money on Wall Street.

"He knew many people in the brokerage business that sold securities and they gave him access to investors," he recalls.

Together, the two men acquired the parent company of two Illinois insurance firms, and then used the money in a failed bid to acquire the troubled airliner Pan Am. They also drained hundreds of millions of investors' dollars and Towers Financial eventually was forced into bankruptcy, Hoffenberg acknowledges.

"This was a criminal investment enterprise. So I'm not trying to state to you that there was a purpose that should be complimented," he says.

Hoffenberg would plead guilty to mail fraud, tax evasion and obstruction of justice in 1995, and would eventually serve 18 years in prison.

Epstein was never charged in connection with the scheme, although Hoffenberg says he told federal prosecutors about his role.

"There's no question that I told them. It makes no sense. Like his whole life makes sense. His death makes no sense," Hoffenberg says.

Why Epstein escaped prosecution is something of a mystery. The federal prosecutor who handled the case, Dan Nardello, declined to comment, saying he never discusses cases he prosecuted.

Former prosecutor Amy Millard came into the case late, during sentencing, and says she remembers little about it after 25 years. But she says Hoffenberg appeared to be a less than trustworthy witness.

"I remember that at the point that I met him and had any dealings with I did not believe he was credible in his statements," says Millard, who's now in private practice at the law firm Clayman and Rosenberg.

Millard also remembers that Hoffenberg in the courtroom showed little sympathy for the many thousands of small investors who had lost money in the scheme.

"I remember that he was extraordinarily arrogant, not taking responsibility for what he had done and that there were a huge number of victims who were hurt by his behavior."

Today Hoffenberg says he is eager to atone for what he did, and says he called some of the victims and urged them to sue Epstein to recoup some of their money.

One of the victims did file a class-action suit against Epstein last year, but the suit was withdrawn after his lawyers argued that the statute of limitations had passed on whatever crimes had been committed.

Hoffenberg says he's still available to help the victims and would testify on their behalf.

"I'm the first one in the line to assist the victims," he says. "At 74, I'd like to go to the pearly gates assisting the victims."

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Jeffrey Epstein has also been accused of other crimes. One of his former business partners says Epstein got away with financial crimes. Steven Hoffenberg spent 18 years in prison for running a Ponzi scheme. And he says Epstein was complicit in those crimes but was never prosecuted. NPR's Jim Zarroli reports.

JIM ZARROLI, BYLINE: At 74, Steven Hoffenberg spends a lot of time reflecting on his long and disreputable past. And these days, one person on his mind is Jeffrey Epstein.

(SOUNDBITE OF ARCHIVED RECORDING)

STEVEN HOFFENBERG: There's so much going through my mind about me and Epstein. It's a lifetime of errors. How do you correct a lifetime of errors?

ZARROLI: Hoffenberg spoke this week by telephone from his hospital bed, where he was preparing for surgery. In the 1980s, Hoffenberg ran a company called Towers Financial. Around that time, he says, a British business acquaintance introduced him to Epstein. Hoffenberg says he was immediately impressed.

(SOUNDBITE OF ARCHIVED RECORDING)

HOFFENBERG: He appeared to be brilliant, extraordinarily gifted and talented in convincing people to buy from him and a criminal mastermind.

ZARROLI: Hoffenberg says he hired Epstein, and they became very close. Hoffenberg became a kind of mentor to him. Epstein helped him raise money on Wall Street.

(SOUNDBITE OF ARCHIVED RECORDING)

HOFFENBERG: He knew many people in the brokerage business that sold securities, and they gave him access to investors.

ZARROLI: And he says the two of them conspired in the scheme that would later send Hoffenberg to prison. Hoffenberg's firm acquired the parent company of two Illinois insurance companies. Then, he says, they used the company's money to launch a failed attempt to buy the airline Pan Am. He says they also drained hundreds of millions of dollars from Towers Financial investors for personal use. Hoffenberg acknowledges his role in the scheme.

(SOUNDBITE OF ARCHIVED RECORDING)

HOFFENBERG: This was a criminal investment enterprise, so I'm not trying to state to you that there was a purpose that should be complimented.

ZARROLI: Hoffenberg would plead guilty in 1995 to mail fraud, tax evasion and obstruction of justice. He says he told federal prosecutors about Epstein's role in the scheme.

(SOUNDBITE OF ARCHIVED RECORDING)

HOFFENBERG: There is no question that I told him. Makes no sense. Like, his whole life makes no sense. His death makes no sense.

ZARROLI: But Epstein would never be charged. Why that is remains unclear. The federal prosecutor who handled the matter declined to discuss it, saying he never comments on past cases.

One former prosecutor who did speak was Amy Millard who's now in private practice at the law firm Clayman & Rosenberg. She came into the case late. And 25 years later, she doesn't remember a whole lot about it. But she says Hoffenberg didn't exactly seem like a trustworthy witness.

AMY MILLARD: I remember that at the point that I met him and having dealings with him, I did not believe that he was credible in his statements.

ZARROLI: Millard says thousands of people who had put money in Towers Financial were hurt when the firm declared bankruptcy after Hoffenberg was charged, and Hoffenberg's demeanor in the courtroom seemed less than sympathetic.

MILLARD: He was extraordinarily arrogant, not taking responsibility for what he had done and that there were a huge number of victims who were hurt by his behavior.

ZARROLI: Now out of prison, Hoffenberg acknowledges that his crimes cost a lot of people their retirement savings. Before Epstein's death, he says, he actually called some of the victims of his fraud. He told them Epstein had walked away with money from the fraud, and Hoffenberg encouraged the victims to sue Epstein. He even offered to testify on their behalf.

(SOUNDBITE OF ARCHIVED RECORDING)

HOFFENBERG: I'm the first one in line to assist the victims. At 74, I'd like to go to the pearly gates assisting the victims.

ZARROLI: One of the victims he contacted did file a class action suit against Epstein last year, and Hoffenberg sued Epstein himself. But Epstein's attorneys argued that the statute of limitations had run out on whatever crimes were committed. And the suits were later withdrawn.

Jim Zarroli, NPR News, New York.

(SOUNDBITE OF JUNG AN TAGEN'S "AUFRAUMEN") Transcript provided by NPR, Copyright NPR.