It’s one of those Wall Street mysteries: How did Jeffrey D. Epstein, the “billionaire financier" and past social pal of Presidents Donald Trump and Bill Clinton, who was arrested on sex-trafficking charges as investigators raided his Manhattan apartment last week, get to be so rich?

Epstein has told interviewers that he managed private fortunes for rich people, which raised the usual skepticism among investment pros, given the lack of public records of his clients and performance.

From his prison cell at Fort Dix and later in a string of legal actions, Epstein’s former boss, Steven J. Hoffenberg, has for years claimed a simpler explanation. Hoffenberg alleges that Epstein kept proceeds from Towers Financial Corp., the vast 1990s Ponzi scheme that landed Hoffenberg a 20-year sentence and an order to repay nearly half a billion dollars — more like $1 billion by now, with interest.

In a string of lawsuits filed by Hoffenberg, and most recently by a pair of Towers investors citing Hoffenberg’s claims, Epstein is described as the “unindicted co-conspirator” that federal criminal prosecutors referenced but never filed charges against in the Towers case. That was how 200,000 Americans lost that half-billion buying Towers’ uninsured high-interest-rate securities, most of which was never recovered.

Epstein’s lawyers say that Hoffenberg’s claims are untrue, that the alleged fraud occurred too long ago for a civil lawsuit, and that Hoffenberg has no standing to sue to get investors’ money back. Hoffenberg was sent to prison in 2002 and released in 2013 from the lock-up at Fort Dix in Burlington County for orchestrating the Towers fraud.

After Epstein’s legal team threatened to seek sanctions and costs for the latest attempt to resurrect Hoffenberg’s claims in a civil lawsuit, the Towers investors last November withdrew their case, preserving the right to refile later.

Even so, you can expect to hear more about Hoffenberg’s allegations now that Epstein is back in the news, and powerful people worry that their names might show up on the guest lists at Epstein’s teenaged sex parties. Fueling stories are the controversial Florida legal settlement that put Epstein into a kind of work-release program for a year, and this week, the New York investigation, which arrested Epstein on Saturday at Teterboro Airport.

Indeed, as I read the Hoffenberg cases these last two days, his allegations were referenced in a Wednesday New York Times story, and repeated by Hoffenberg in a Quartz article.

Here’s what Hoffenberg has alleged:

Hoffenberg was chief executive at Towers from 1975 to 1993, hiring Epstein as his full-time assistant and to raise capital. Hoffenberg says both men freely appropriated clients’ money as their own, and ran illegal deals to make more.

For example, in 1987 and 1988, Hoffenberg alleged, Epstein ran “a scheme” to finance takeovers of Pan American Airways Inc. and Emery Air Freight Corp., using cash from a pair of Illinois insurance companies that Towers had promised regulators it would keep solvent. The deals failed. The insurers lost their capital; Illinois sued on behalf of the public, which was forced to bail out failed insurers.

The U.S. Securities and Exchange Commission (SEC) brought civil fraud charges — against Hoffenberg as head of the company. Federal prosecutors followed with a fat fraud case. In 1997, he was convicted and sentenced to 20 years, plus restitution.

With Hoffenberg locked up in the Pinelands, Epstein went on with his jet-set parties, and also set up a Caribbean-based hedge fund, which Hoffenberg has since alleged that Epstein “created entirely with all of the fraudulently acquired money from Towers.”

In 2001 and 2003, Hoffenberg sued law firms involved in the Towers case, which he claimed had wrongly benefited from Towers’ ill-gotten gains. Federal judges tossed both complaints. In 2013, he sued the federal government, on behalf of his own victims, for not doing more to help get their money back. This time, the judge threatened his lawyer with sanctions for a “frivolous” action, and Hoffenberg withdrew.

Out of prison, now in his 70s, Hoffenberg picked up the legal trail. In 2015, he filed a petition in federal court naming Epstein as the previously unnamed “co-conspirator” cited in the federal cases against Hoffenberg’s Ponzi schemes.

In 2016, Hoffenberg filed suit to impose a “constructive trust” on Epstein’s businesses, which his lawyers said under New York law would enable them to seize Epstein-controlled funds and send them to the Towers victims. After New York-based lawyer Frank R. Schirripa, who represented investors, and his team complained that complaint was time-barred and Hoffenberg lacked standing, Hoffenberg withdrew it, with prejudice — an agreement not to file it again, but also a prelude, sometimes, to a class-action suit.

And sure enough, last summer, two old Towers investors, Marvin Gerber and Kalma Koenig, sued Epstein again, referencing Hoffenberg’s allegations. They added an affidavit signed by Hoffenberg himself, alleging that Epstein “continues to hide and refuses to identify the assets and funds” that he improperly kept; that Epstein got a CPA to falsify Towers’ financial statements; and that federal prosecutors “offered me a reduced sentence in exchange for information about Epstein’s role,” before his own sentencing. He refused.

Instead, Hoffenberg in his affidavit brags that he has, since going to prison, made an “effort to expose Mr. Epstein’s fraudulent Ponzi schemes,” which, he alleges, Epstein “continuously conceals” from banks and current clients so that “Epstein has remained free and has used and benefited from the ill-gotten gains he amassed as a result of his criminal and fraudulent activities.”

Which raises a big honking question: If Epstein was guilty, too, why didn’t Hoffenberg rat him out and maybe shave years off his own sentence?

“The judge asked me the same question. I couldn’t answer that,” Gary Baise, one of Hoffenberg’s lawyers, told me, laughing. He noted Hoffenberg’s efforts to pursue Epstein included “helping the Miami Herald” in its reporting investigation of Epstein’s sex cases. “He’s been like Inspector Clouseau,” Baise added.

Where are the facts? “Noticeably absent" from Hoffenberg’s allegations “are any details of who said what to whom, when,” Epstein’s lawyers noted caustically in their response to the 2018 lawsuit.

“This action is just Hoffenberg’s rehashing of several of his prior lawsuits aimed at harassing” Epstein and his businesses “by falsely accusing defendant Epstein of being the so-called co-conspirator.” Again, they call for sanctions.

How about that? I asked Baise. He noted Epstein has had high-powered attorneys: Clinton prosecutor Kenneth Starr, and Harvard professor Alan Dershowitz, among others.

Another basic question: Why would the SEC really let a big fish like Epstein go after helping the Justice Department put his partner away?

Actually, the SEC’s lame history may be what gives Hoffenberg’s allegations any public traction at all.

The SEC can be very diligent about going after garden-variety family-gossip insider-traders, or unregistered brokers who try to sell shares in their pipe-dream small businesses.

But it sometimes seems to give the powerful the benefit of the doubt.

Remember that’s the same regulatory band that couldn’t catch that record-breaking New York fraudster Bernie Madoff, despite years of detailed complaints; the same gang that let Michael Liberty off the hook from paying the $6 million a judge ordered him to pay the Pennsylvania and Philadelphia pension funds and other investors he hurt for tens of millions in unauthorized investments because he claimed he was too poor to pay — even as Liberty was raising hundreds of millions for his telecom flop, Mozido Inc. (Ten years later, the SEC realized it had been had and sued Liberty. It’s still trying to collect.)

That sort of record leaves such characters as Hoffenberg to keep raising that kind of question about his old assistant: Is Epstein another big fish that got away?