The lawsuit, first reported by the Daily Mail Online, could finally lift the veil on how the secretive Epstein became rich enough to hire a dream team of lawyers to represent him in his now-closed underage sex criminal case, including star defense lawyer Alan Dershowitz and former Monica Lewinsky prosecutor Ken Starr.

Steven Hoffenberg says ex-business partner Jeffrey Epstein is a criminal, just like him (Tower Investors photo)

In an unusual complaint filed late Friday, former New York Post publisher Steven Hoffenberg, the plaintiff, accuses Epstein of helping him defraud investors in the mid-1990s when Hoffenberg and, allegedly, Epstein ran a classic pyramid scheme through Hoffenberg’s Towers Financial Corporation.

The duo allegedly used money from the sale of bonds and securities and promissory notes from early investors to cover losses they incurred on behalf of newer investors and affiliated business, and personal expenses to keep a jet-setting-and-champagne lifestyle.

According to the lawsuit, the duo suffered losses in failed attempts to buy now-defunct Pan American Airways as well as a freight air carrier Emery.

What’s unusual about the new lawsuit is that Hoffenberg, who also happens to run a major PAC for presidential candidate Donald Trump, is also a convicted felon.

Donald Trump has a Super PAC? And it’s run by a guy convicted of financial crimes? (via YouTube)

Hoffenberg was sentenced to 20 years in a federal prison for his role in the Ponzi scheme they ran from the late 1970s until 1993, when authorities figured out what was happening.

While prosecutors allegedly offered to reduce Hoffenberg’s sentence in exchange for information about Epstein’s role in the scam, Hoffenberg refused to cooperate.

He served 18 years before being placed on supervised release for three years. He also paid $1 million in fines and was ordered to reimburse investors about $475 million.

So far, Hoffenberg has ponied up $200 million.

According to Hoffenberg’s new lawsuit, however, Epstein has been enjoying the spoils of the scam for the past 30 years.

Woody Allen with wife Sun Yi and Jeffrey Epstein in 2013 in Manhattan (INF photo)

In addition to a luxury townhouse at 9 East 71st Street in Manhattan, Epstein owns a $10.7 million-house in Palm Beach and a private island in the Virgin Islands. That’s where he lives currently, according to the Florida sex offenders registry.

What’s more, Epstein is the CEO of The Financial Trust Company, which runs a hedge fund estimated to be in the $50 billion-range.

And if you believe Hoffenberg’s lawsuit, written by Manhattan attorney Alan P. Fraade, Epstein started that business by selling worthless securities for Hoffenberg.

“Mr. Epstein … was a full-time associate and expert consultant for Mr. Hoffenberg in financial services including raising capital by selling securities,” the lawsuit reads.

Epstein’s company, the lawsuit claims, was “created entirely with the monies in excess of $500 million fraudulently acquired through fraudulent Ponzi schemes.”

Because he didn’t have a broker’s license, the lawsuit reads, Epstein made his purchases traded stocks and bonds through third parties then used proceeds on himself.

However, Hoffenberg claims in his filing, Epstein wasn’t as good as he believed.

At one point, he lost at total $1.080 million in a failed attempt to buy failing Pan Am months before the downing of Flight 103 over Lockerbie, Scotland, and purchase of a majority shares in Emery air freight.

Hoffenberg accuses Epstein of manipulating Emery’s stock to minimize his losses while costing Tower investors millions.

The lawsuit is for fraud, unjust enrichment, breach of fiduciary duty and negligence. It’s asking a jury to order Epstein to make whole Tower investors as well as pay unspecified damages.

Neither Hoffenberg nor his attorney comments.

Epstein made news over the past few years for his friendship with Prince Andrew and allowing former President Clinton to use his private jet repeatedly.

British blue blood Prince Andrew addressed accusations that he had sex with one of Epstein’s underage girls, a former Royal Palm Beach Community High School student when she was 17 (AP photo)

In unrelated lawsuit currently pending in Florida, unidentified women who claim they were abused by Epstein in the early 2000s when they were teens claim he made them into sex slaves who he passed on to his friends.

In a criminal court in Palm Beach County in 2008, Epstein was accused of having staff members recruiting troubled high school girls in suburban West Palm Beach to travel to his nearby mansion for massages, sexual performances and sex.

The victims claimed a room in Epstein’s waterfront mansion was set up to look like a dungeon.

In an unusually lenient deal with federal prosecutors that sparked allegations Epstein benefited from high-level political protection, Epstein was allowed to plead guilty to charges he procured minors for prostitution.

He was sentenced to 18 months in a county prison. He ended up serving 13 months, mostly on weekends.

http://www.gossipextra.com/2016/05/29/jeffrey-epstein-palm-beach-steven-hoffenberg-donald-trump-5984/