Jeffrey Epstein worked at financial firm that engaged in massive Ponzi scheme in 1980s and 1990s


Jeffrey Epstein worked as a paid consultant during the 1980s and 1990s at a New York financial company that participated in one of the largest Ponzi schemes in American history, according to court records and the accounts of attorneys and executives connected with the firm, Towers Financial.

Towers was a bill collection agency founded by Steven J. Hoffenberg, who told CBS News he hired Epstein in 1987 to help commit a billion dollars worth of financial fraud.

“He was my best friend for years. My closest friend for years,” Hoffenberg told CBS News, speaking of Epstein. “We ran a team of people on Wall Street, investment people that raised these billion dollars illegally. He was my guy, my wingman.”

The scheme worked like this, according to prosecutors who later brought charges against Hoffenberg: Between 1988 and 1993, Towers raised more than $400 million by selling bonds and promissory notes to investors. Hoffenberg and his associates then used the money to cover operating costs, repay earlier investors —and enrich themselves.

“I was one of the investors,” said Marvin Gerber in an interview with CBS News. “He swindled me out of $250,000.”

Hoffenberg was investigated by the Securities and Exchange Commission and the U.S. Attorney’s office for the Southern District of New York, and pleaded guilty in 1995 to five criminal charges. He was sentenced in 1997 to 20 years in prison and was released in 2013. Towers Financial executives Mitchell Brater and Michael Rosoff were given prison sentences between seven and nine years. Other employees who pleaded guilty received civil judgments.

Epstein was never charged in the fraud. His legal team did not respond to CBS News’ request for comment. Epstein died in an apparent suicide this weekend in a Manhattan jail cell while awaiting trial for sex trafficking charges. During his bail proceedings last month, his asset summary listed more than $559 million in total assets. – READ MORE

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