Steven Hoffenberg, Debt Baron Who Ran a Vast Fraud, Dies at 77

When the takeovers flopped, The Washington Post reported, the insurers became insolvent and went into receivership. Thousands of customers in Illinois and Ohio lost out on millions of dollars meant to pay medical bills. Illinois regulators and the Securities and Exchange Commission sued Towers.

By 1988, according to prosecutors, the Towers fraud had begun to expand. Starting that year, they said, the company sold more than $270 million in promissory notes, offering fat returns and targeting widows, retirees and others with limited funds.

Mr. Hoffenberg’s splashiest move came in January 1993, when the financially embattled owner of The New York Post, Peter Kalikow, turned to him to rescue the paper.

Mr. Hoffenberg relished the chance.

“I’m here for the glory,” he told Mike McAlary, then a columnist for The Post. “I want to have a voice in New York City. I’ve made millions. Now I want to have some excitement.”

The thrill was short-lived. The S.E.C. blocked Mr. Hoffenberg’s access to the money he needed to buy the newspaper, forcing him into a contentious partnership with another audacious New York businessman, Abraham Hirschfeld. When the bid fizzled, Rupert Murdoch, who had previously owned The Post, bought it again.

Soon, everything came to a halt. Towers went bankrupt, and federal prosecutors filed the fraud case against Mr. Hoffenberg. He ultimately pleaded guilty to five counts, including conspiracy to commit securities fraud and conspiracy to obstruct justice by directing employees to lie to S.E.C. investigators.

Article source: https://www.nytimes.com/2022/08/26/business/steven-hoffenberg-dead.html