Jeffrey Epstein: Shamed tycoon ‘made fortune from a fraud’

Steven Hoffenberg says Epstein helped him run one of the biggest Ponzi schemes seen in America, conning thousands of investors out of more than £344million. 

When FBI agents uncovered the scam at Hoffenberg’s New York firm Towers Financial in 1997, he pleaded guilty to fraud and was jailed for 20 years, but Epstein was not charged. Hoffenberg claimed prosecutors were happy treating him as a scapegoat because they didn’t want a court case dragging on for years.

It wasn’t the only time Epstein got off lightly. He received a 13-month sentence when he was put on trial for sex abuse in 2006. 

After serving almost his full sentence, Hoffenberg has revealed just how closely he was helped in his fraud by his protege in the documentary Jeffrey Epstein & Prince Andrew: The True Story. 

The show, due to broadcast in the US this month and later in the UK and Ireland, sheds light on how Epstein acquired the wealth to afford a private jet, Caribbean island, two US mansions and a desert ranch. It also reveals for the first time Epstein’s crooked past prior to creating a child sex trafficking ring and becoming friends with the Duke of York, who has denied having sex with a 17-year-old girl supplied by the paedophile.

Hoffenberg says he initially hired Epstein as a consultant in the 1980s then made him a partner when he realised how gifted he was at “schmoozing” rich clients out of huge amounts of money. 

“Epstein had a very strong dream,” he declared, “and he increased that Ponzi scheme [at one stage] to about a billion dollars. In 1994, when I was arrested and charged, he was not. He walked away without a scratch.” Now Hoffenberg believes his guilty plea may have helped Epstein evade justice because the Manhattan District Attorney had a scapegoat and wanted to close the case quickly. Had Epstein been charged and pleaded not guilty, it could have dragged on for years. 

Of his own part in their Ponzi scheme, Hoffenberg, who became a born-again Christian behind bars and briefly worked for a pro-Trump political action team in 2016, declared: “There’s no excuse I can render today but to be repentant.”

Hoffenberg’s allegations are supported by a 2018 lawsuit, filed by former Towers Financial investors, in which Epstein – who died in his jail cell, aged 66, last August – is described as an “uncharged co-conspirator” in the original Ponzi scheme. 

The suit also claims the millions in stolen funds helped Epstein create his Wall Street hedge fund. 

Hoffenberg said: “He helped me set it up. 

“He was my colleague daily, seven days a week.”

source: express.co.uk