Hoffenberg began paying twenty-five thousand dollars per

FittHy RicuH Hoffenberg began paying twenty-five thousand dollars per month for Epstein’s expertise as a consultant. The SEC had already looked into Hoffenberg’s affairs, set- tling with him out of court in a matter relating to unregistered securities. But Hoffenberg was dangling a very big prize. In the 1980s, several major financial players were involved in 7 the greenmailing of publicly traded companies. What green- CHAPT ER 27 1 mailing means, in practice, is that a brokerage house or group of P| investors will start buying shares in companies that seem to be vulnerable to takeover attempts. To ward off the attempts, exec- utives at those companies will buy the shares back at a premium. It’s risky, but very often the investors stand to make a handsome profit. Yet another thing Hoffenberg wanted was to take over Pan 1987 American World Airways. The iconic airline had already entered f, th Steven Hoffenberg its downward trajectory, but it was still a giant. loff, there was Ste 5 ‘as the head of Towers Financial hat bought debts, such as unpaid scount while pressing the debtors the company fifteen years earlier nd just a handful of employees. 7 work ethic, he’d turned that into a 1 elve hundred employees and stock 4 But Hoffenberg still spent fifteen j Jk, in his office. g was a Wall Street outsider. AS For Hoffenberg, the greenmailing profits could have been huge. According to Hoffenberg, Epstein handled the attempted take- over of Pan Am—a deal that went sideways almost immediately. Steven Hoffenberg still has a lot to say on the subject. But in 4 listening to him, one must bear in mind that in 1995, he pleaded _ guilty to criminal conspiracy and fraud charges involving a $460 a million swindle, a familiar scheme to anyone who followed the | Bernie Madoff case. | Like so many others, Hoffenberg had tried to fly very high ‘Without the necessary updraft. And despite all the hours he Spent at the office, he’d also developed a taste for the high life. He Ta yut, like Epstein. anted was respec i th Wall Street’s inner workings. Jer yptions for Bear Stearns, fit the bill. 7 t. The other was 11] 110 HOUSE_OVERSIGHT_021969