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Case 1:19-cv-03377 Document 1-8 Filed 04/16/19 Page 12 of 16
http://www.vanityfair.com/news/2003/03/jeffrey-epstein-200303

Epstein has denied he ever had any dealings with anyone from the insurance companies. But
Richard Allen says he recalls talking to Epstein at Hoffenberg’s direction and telling him it was
urgent they retrieve the missing bonds for a state examination. According to Allen, Epstein said,
“We’ll get them back.” He had “kind of a flippant attitude,” says Allen. “They never came
back.”

Epstein, according to Hoffenberg, also came up with a scheme to manipulate the price of Emery
Freight stock in an attempt to minimize the losses that occurred when Hoffenberg’s bid went
wrong and the share price began to fall. This was alleged to have involved multiple clients’
accounts controlled by Epstein.

Eventually, in 1991, insurance regulators in Illinois sued Hoffenberg. He settled the case, and
Epstein, who was only a paid consultant, was never deposed or accused of any wrongdoing.
Barry Gross, the attorney who was handling the suit for the regulators, says of Epstein, “He was
very elusive…. It was hard to really track him down. There were a substantial number of checks
for significant dollars that were paid to him, I remember…. He was this character we never got a
handle on. Again we presumed that he was involved with the Pan Am and Emery run that
Hoffenberg made, but we never got a chance to depose him.”

“From the government’s discovery in the main sentencing against Hoffenberg it would seem the
government was perhaps a bit lazy,” says David Lewis, who represented Mitchell Brater. “They
went for what they knew they could get … and that was the fraudulent promissory notes [i.e., the
much larger and unrelated part of Hoffenberg’s fraud, based in New York State]…. What they
couldn’t get, they didn’t bother with.”

Another lawyer involved in the criminal prosecution of Hoffenberg says, “In a criminal
investigation like that, when there is a guilty plea, to be quick and dirty about it, discovery is
always incomplete…. They don’t have to line up witnesses; they don’t have to learn every fact
that might come out on cross-examination.”

Epstein was involved with Hoffenberg in other questionable transactions. Financial records show
that in 1988 Epstein invested $1.6 million in Riddell Sports Inc., a company that manufactures
football helmets. Among his co-investors were the theater mogul Robert Nederlander and
attorney Leonard Toboroff. A source close to this transaction claims that Epstein told
Nederlander and Toboroff that he had raised his share of the money from a Swiss banker, whose
identity they could not be allowed to know. But Hoffenberg has claimed the money came from
him, and Towers’s financial statements for that year show a loan to Epstein of $400,000.
(Epstein has said he can’t remember the details and has disputed the accuracy of the Towers
financial reports.)

Around the same time, Nederlander and Toboroff let Epstein come in with them on a scheme to
make money out of Pennwalt, a Pennsylvania chemical company. The plan was to group together
with two other parties to take a substantial declared position in the stock. According to a source,
Epstein was supposed to help Nederlander and Toboroff raise $15 million. He seemed to fail to
find other investors, say those familiar with the deal. (Epstein has said he was merely an
investor.) He invested $1 million, which he told his co-investors was his own money. But in his

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