NEW YORK — Steven Hoffenberg, the former head of scandal-ridden Towers Financial Corp. and once a suitor for the New York Post newspaper, was arrested Thursday and charged with securities fraud and obstruction of justice.
The criminal charges relate to a civil suit filed last year by the Securities and Exchange Commission that accused Hoffenberg and Towers, now in bankruptcy, of using false financial statements to sell more than $400 million in securities.
Securities regulators consider the criminal case a key move toward stopping the flamboyant debt collector from continuing to operate or open new businesses.
Hoffenberg, 48, was expected to be released on a $1-million bond Thursday evening.
The pending SEC civil suit accuses him of cheating 2,800 investors in 40 states, but authorities said Hoffenberg is still in business, with two new companies in New York: Stratford Credit Corp. and Haley Capital Corp.