Steven J. Hoffenberg, a brash New York debt mogul who spent 18 years in federal jail after admitting to working a fraud scheme that prosecutors mentioned was then among the many largest such crimes in U.S. historical past, was discovered useless on Tuesday within the modest condo in Derby, Conn., the place he had lived for about two years. He was 77.
The demise was confirmed on Friday by his daughter, Haley Hasho, and later by the Derby police.
Lt. Justin Stanko of the Derby police mentioned the situation of Mr. Hoffenberg’s physique when officers discovered it recommended that he had been useless for a couple of week. The officers have been conducting a examine after being contacted by a good friend of Mr. Hoffenberg’s and by a non-public investigator, Lieutenant Stanko mentioned.
An preliminary post-mortem by the state medical expert’s workplace didn’t discover indicators of trauma on the physique, the police mentioned in a information launch, which additionally mentioned an official reason behind demise was awaiting the outcomes of further toxicology checks.
Mr. Hoffenberg, who managed The New York Put up for a short, tumultuous time in 1993, pleaded responsible two years later to conspiracy and fraud costs arising from a Ponzi scheme tied to his predominant firm, Towers Monetary Company, which was primarily a set agency that purchased debt from companies like hospitals, nursing houses and telephone firms.
Prosecutors mentioned that Towers bought greater than $460 million in fraudulent notes and bonds to buyers and used a few of the cash to pay curiosity owed to earlier buyers. The remaining went to propping up a fiscal home of playing cards that relied on inflated income and phony earnings to make Towers appear like a serious well being care financing agency.
In his responsible plea, Mr. Hoffenberg, who as soon as had a company jet, a limousine, a yacht, a Lengthy Island property and a Manhattan condo, admitted to being the scheme’s mastermind. After leaving jail, he sought accountable another person: his onetime enterprise affiliate Jeffrey Epstein, who was later charged with the serial sexual abuse of younger ladies and women.
In accordance with court docket and census data, Steven Jude Hoffenberg was born on Jan. 12, 1945, in Brooklyn, together with a twin brother, Martin, to Harry Hoffenberg, who labored in insurance coverage, and his spouse, Bernice.
Steven Hoffenberg preferred to painting himself “in Horatio Alger style,” The New York Occasions reported in 1993. He mentioned he was a Metropolis School of New York dropout and had began his profession with simply $2,000.
Within the Seventies, many small-business house owners in New York Metropolis knew Mr. Hoffenberg as a so-called bust-out artist. He would take over companies, use them to purchase items on credit score that he may then promote for money, and never pay his suppliers. His targets have been left in monetary smash. He arrived at liquidation gross sales in a chauffeured limousine.
A New York choose, commenting in a lawsuit filed in 1980 by the unique proprietor of 1 such enterprise, known as Mr. Hoffenberg’s habits “surprising to the conscience of the court docket.”
As Mr. Hoffenberg’s enterprise grew, his monetary machinations turned more and more complicated. In 1980, he fashioned a non-public firm to personal the concentric company shells that made up Towers. In 1986, that firm purchased a publicly traded shell firm in a deal that allowed Mr. Hoffenberg to take Towers public with out submitting a proper prospectus to federal regulators.
By that 12 months, Towers had added finance and leasing models to its core collections enterprise and claimed to have almost 1,200 workers and nationwide gross sales of $95 million.
Whether or not the numbers have been true is unknown. Mr. Hoffenberg, who developed a fame as a workaholic and a loner, additionally had a penchant for exaggeration.
In his 1987 annual report, for instance, he known as the corporate’s bill-collecting unit “a frontrunner in its subject” with out providing particulars. That very same 12 months, he instructed Towers shareholders that the corporate would quickly search a Nasdaq itemizing. It by no means did.
It was additionally in 1987, Mr. Hoffenberg instructed The Occasions in 2019, that he met Mr. Epstein, a Brooklyn-born school dropout who had parlayed a educating job at Manhattan’s prestigious Dalton Faculty right into a job on the funding agency Bear Stearns.
The Nineteen Eighties takeover growth was in full swing. Mr. Hoffenberg employed Mr. Epstein as a guide for $25,000 a month. The association lasted about six years.
“I assumed Jeffrey was one of the best hustler on two ft,” Mr. Hoffenberg instructed The Washington Put up in 2019. “Expertise, charisma, genius, legal mastermind. We had a factor that would make some huge cash. We known as it Ponzi.”
Years later, Mr. Epstein turned nicely often known as an enigmatic cash supervisor and convicted intercourse offender who moved in elite circles. He hanged himself at a federal jail in Manhattan in 2019 whereas awaiting trial on sex-trafficking costs.
Setting out as company raiders, Mr. Hoffenberg and Mr. Epstein first purchased two small Illinois insurance coverage firms for $20 million.
They tried to amass Pan American World Airways in 1987 with a number of notable companions as advisers, together with former President Richard M. Nixon’s brother Edward.
Mr. Hoffenberg and Mr. Epstein siphoned cash from one of many insurers to make the Pan Am bid look extra viable, but it surely failed anyway. They used the same technique the subsequent 12 months, plundering the second insurer for a run at Emery Air Freight, an effort Mr. Hoffenberg later described in a court docket submitting as an “epic failure.”
When the takeovers flopped, The Washington Put up reported, the insurers turned bancrupt and went into receivership. Hundreds of consumers in Illinois and Ohio misplaced out on hundreds of thousands of {dollars} meant to pay medical payments. Illinois regulators and the Securities and Trade Fee sued Towers.
By 1988, based on prosecutors, the Towers fraud had begun to increase. Beginning that 12 months, they mentioned, the corporate bought greater than $270 million in promissory notes, providing fats returns and focusing on widows, retirees and others with restricted funds.
Mr. Hoffenberg’s splashiest transfer got here in January 1993, when the financially embattled proprietor of The New York Put up, Peter Kalikow, turned to him to rescue the paper.
Mr. Hoffenberg relished the possibility.
“I’m right here for the glory,” he instructed Mike McAlary, then a columnist for The Put up. “I wish to have a voice in New York Metropolis. I’ve made hundreds of thousands. Now I wish to have some pleasure.”
The fun was short-lived. The S.E.C. blocked Mr. Hoffenberg’s entry to the cash he wanted to purchase the newspaper, forcing him right into a contentious partnership with one other audacious New York businessman, Abraham Hirschfeld. When the bid fizzled, Rupert Murdoch, who had beforehand owned The Put up, purchased it once more.
The whole lot quickly got here to a halt. Towers went bankrupt, and federal prosecutors filed the fraud case towards Mr. Hoffenberg. He in the end pleaded responsible to 5 counts, together with conspiracy to commit securities fraud and conspiracy to hinder justice by directing workers to deceive S.E.C. investigators.
His lawyer instructed the choose that the plea was being entered “to spare Mr. Hoffenberg the trauma, embarrassment and expense of a trial.”
After leaving jail, nevertheless, Mr. Hoffenberg famous that he had instructed the grand jury it was Mr. Epstein, who was not charged within the case, who had engineered the transactions that stored the Towers fraud alive.
“He was the architect,” Mr. Hoffenberg instructed The Washington Put up.
After being launched from jail in 2013, Mr. Hoffenberg mentioned he hoped to make amends to these he had duped. He additionally made frequent trigger with ladies who mentioned Mr. Epstein had sexually assaulted them.
A type of ladies, Maria Farmer, mentioned that she and Mr. Hoffenberg had turn into associates. She was the one who known as the Derby police.
She mentioned that Mr. Hoffenberg was completely different from his public persona.
“If I had to make use of one phrase to explain him it will be ‘variety’,” she mentioned.
Mr. Hoffenberg was married not less than twice. His first marriage led to divorce, based on a 1994 Occasions article. Particulars a couple of second marriage, to Lisa Twardowski, weren’t instantly accessible. Ms. Twardowski, who glided by Lisa Twardeau, died in 2014.
Data on Mr. Hoffenberg’s survivors apart from Ms. Hasho was not instantly accessible.
In an interview, Ms. Hasho, whose mom was in a relationship with Mr. Hoffenberg on the time of the federal prosecution, mentioned she first met her father after he left jail when she was 19, that their relationship was “sophisticated,” and that she and her mom had “by no means benefited from any of his monetary endeavors.”
“Steven had uncommon attraction and a masterful thoughts, however didn’t use it fruitfully,” Ms. Hasho mentioned. “The remaining is in God’s arms.”
How Mr. Hoffenberg, who as soon as lived on Sutton Place, an unique handle on Manhattan’s Higher East Aspect, got here to reside in a small first-floor unit in Derby, an previous manufacturing facility city an hour and a half from New York Metropolis, was unclear.
Pamela Gelder, who, along with her husband, owns the condo, mentioned Mr. Hoffenberg was an “preferrred tenant”: quiet, nicely dressed, well mannered.
“He calls at 8 a.m. the primary of each month and asks after I’m coming to get the lease,” she mentioned. “How are you going to get mad at a man like that?”
Ms. Gelder mentioned she had been unaware of his historical past.
“It’s a great factor I didn’t know,” she mentioned, “as a result of I might have requested him a whole lot of questions.”
Mike Baker contributed reporting. Kitty Bennett contributed analysis.
