Steven Jude Hoffenberg (1945 – 2022) founded Tower Financial Corporation, a Manhattan debt‑collection outfit that imploded in 1993 when investigators uncovered a $460 million Ponzi swindle—the biggest of its era.
He pleaded guilty in April 1995, was sentenced to 20 years, paid a $1 million fine, and owed $463 million in restitution — he served 18 years before his 2013 release. Hoffenberg always maintained that his former consultant Jeffrey Epstein designed the fraud and evaded charges.
On August 23, 2022, police found Hoffenberg dead in his Derby, Connecticut apartment — no trauma was detected and toxicology results were inconclusive.1234
Timeline
Background and Tower Financial
Hoffenberg entered debt buying in the early 1970s and, by the late 1980s, was raising cash through high‑yield promissory notes that were secretly used to repay earlier investors and underwrite a lavish lifestyle.
SEC staff began probing the note sales in 1992; the agency and the U.S. Attorney filed civil and criminal complaints in February 1993. The SEC's News Digest on February 18 1994 announced his arrest on fraud and obstruction counts.6
Criminal Resolution
Hoffenberg pleaded guilty to five counts—including securities fraud, mail fraud, and obstruction—in April 1995 and faced up to 25 years.
Judge Robert W. Sweet imposed a 20‑year prison term in March 1997, calling the losses "staggering". A 1995 federal opinion and later docket entries detail restitution orders exceeding $460 million.2710
Relationship with Jeffrey Epstein
Hoffenberg met Epstein in 1987 through British arms broker Douglas Leese and hired him at $25,000 a month plus a $2 million loan. Epstein occupied offices in the Villard Houses and was introduced as "consultant and strategist."511
Epstein and Hoffenberg tried but failed to seize Pan Am (1987) and Emery Air Freight (1988) using Tower cash, then returned to large‑scale note sales.5
Tower Financial filed for bankruptcy in March 1993; Epstein left the firm and was never charged. Hoffenberg later called Epstein "the architect" of the scam in media interviews and court filings, including a 2016 SDNY civil suit seeking restitution.58
In 2019, after Epstein's sex‑trafficking arrest, Hoffenberg repeated that Epstein was his "uncharged co‑conspirator."3
Post‑Prison Activities
Released in 2013, Hoffenberg promoted a "Victims Financial Restitution Fund," appeared in numerous press pieces, and provided background to investigators examining Epstein's finances. His claims drew coverage from CBS, Quartz, and The Daily Beast.51112
Death in 2022
A friend requested a welfare check; Derby police entered Hoffenberg's apartment on August 23 2022 and found his body in an advanced state of decomposition. The Connecticut medical examiner ruled out foul play; toxicology findings were not released publicly. AP, NBC Connecticut, and The Daily Beast all confirmed the identification.1139
Connections Snapshot
Hoffenberg's closest business tie was Epstein, whom he placed at the center of Tower's fundraising and attempted takeovers. Other notable links include arms dealer Douglas Leese (introduced Epstein), lawyers Mitchell Brater and Michael Rosoff (Tower executives later jailed for related fraud), and journalists who covered his fall—AP, Los Angeles Times, Washington Post, and Bloomberg among them.514
Unresolved Issues
- Victim recovery: Tower investors have collected only a fraction of court‑ordered restitution; litigation targeting Epstein's estate is pending in SDNY.8
- Extent of Epstein's role: No prosecutor has formally tested Hoffenberg's accusations in court, leaving a gap in the factual record.3
Source Diversity Note
Primary material includes SEC releases, federal court opinions, and contemporary press from AP, Los Angeles Times, Washington Post, CBS News, Quartz, Daily Beast, Bloomberg, CT Post, NBC Connecticut, and law‑library documents—providing a multi‑angle record of Hoffenberg's rise, downfall, and claims against Epstein.