Steven Hoffenberg, the former chairman of New York-based Towers Financial Corp., was indicted last week by a federal grand jury in Chicago on charges that he skimmed $3 million in funds from two defunct insurance companies.
The 13-count indictment is the latest in a string of legal troubles for the former healthcare financier. In February, the U.S. attorney's office in New York filed criminal charges against Mr. Hoffenberg for securities fraud and obstruction of justice (Feb. 21, p. 16).
Mr. Hoffenberg was arraigned on those charges last week in U.S. District Court in New York. He pleaded not guilty and was released on $1 million bail.
The Chicago indictment charged Mr. Hoffenberg and other unnamed co-defendants with misappropriating $3 million from the United Fire Insurance Co. and Associated Life Insurance Co., two Des Plaines, Ill.-based insurers acquired by Towers in 1987.
It said the funds were used to pay his stepdaughter's tuition and credit card bills, to purchase stock in Pan American Airways and to provide cash for other personal expenses.
A call to Mr. Hoffenberg's office was referred to his attorney, Jeff Hoffman, who did not return the call.
An arraignment date has not been set. If convicted on all counts, Mr. Hoffenberg could be imprisoned for 70 years and face a maximum fine of $3.25 million.