In 1987, he met Jeffrey Epstein through a British defense contractor named Douglas Leese (died 2011), who Hoffenberg claimed was an arms dealer.[15] Leese was, with Saudi Adnan Khashoggi and Prince Bandar bin Sultan Al Saud, architect in the billion dollar Al-Yamamah arms deal, Britain's biggest arms deal ever concluded – earning the prime contractor, BAE Systems, at least £43 billion in revenue between 1985 and 2007.[16] Leese told Hoffenberg about Epstein: "The guy's a genius, he's great at selling securities. And he has no moral compass." Hoffenberg hired Epstein about 1987 and 1993 to help with the Towers Financial Corporation, paid him $25,000 a month and gave him a $2 million loan in 1988 that Epstein would never have to pay back.[17][3] Hoffenberg set Epstein up in offices in the Villard Houses.[3] They unsuccessfully tried to take over Pan Am in a corporate raid with Towers Financial as their raiding vessel. Their bid failed, in part because of the 1988 terrorist bombing of Pan Am Flight 103 over Lockerbie, which ultimately contributed to the airline's bankruptcy. A similar unsuccessful bid in 1988 was made to take over Emery Air Freight Corp.[3] During this period, Hoffenberg and Epstein worked closely together and traveled everywhere on Hoffenberg's private jet.[3][18][19] Hoffenberg began using Towers Financial funds to pay off earlier investors and pay for a lavish lifestyle that included a Locust Valley, New York, Long Island mansion, as well as homes on Sutton Place (in Manhattan) and in Florida, and a number of cars and planes.[3][20] In court documents, Hoffenberg claimed that Epstein was intimately involved in the Ponzi scheme.[21][22] Epstein left Towers Financial before it collapsed and was never charged for being involved with the massive investor fraud committed.[23][24]

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