Epstein, convicted of soliciting an underage girl for prostitution in 2005, is a multi millionaire with numerous properties including a private island

The millionaire had then used the ill-gotten gains to fund his champagne lifestyle, the suit alleges

Hoffenberg claims in his lawsuit that Epstein was involved in the scam

He had pleaded guilty to swindling investors at Towers Financial Corporation in one of the biggest Ponzi schemes in US history

Hoffenberg was sentenced to 20 years in jail in 1995 prison for his role in a Ponzi scheme and ordered to repay $475 million

Epstein is accused of ripping off 200,000 small to mid-size investors in the suit brought by former business partner Steven Hoffenberg

Sex offender financier Jeffrey Epstein is being sued by a former business partner who accuses him in a $1bn lawsuit of ripping off up to 200,000 investors, according to papers filed in a United States federal court.

Epstein, 63, is a fabulously wealthy Wall Street prodigy with ties to some of the world’s most powerful and famous people, including Prince Andrew, Bill Clinton and filmmaker Woody Allen.

But he is also a convicted sex offender in his weekend home of Palm Beach, Florida, who has to register with authorities each time he moves to a different location eight years after he pleaded guilty to procuring teenage girls for prostitution.

Sex offender financier Jeffrey Epstein (left) is being sued by former business partner Steven Hoffenberg (right) who accuses him in a $1bn lawsuit of ripping off up to 200,000 investors

And now, the multi-millionaire is being accused in a new civil lawsuit brought by a former business partner of ripping off 200,000 small to mid-size investors out of what could amount to $1 billion, including interests.

The lawsuit could finally lift the veil on how the secretive Epstein became rich enough to hire a dream team of lawyers to represent him in his now-closed underage sex criminal case, including star defense lawyer Alan Dershowitz and former Monica Lewinsky prosecutor Ken Starr.

In an unusual complaint filed late Friday, former New York Post publisher Steven Hoffenberg, the plaintiff, accuses Epstein of helping him defraud investors in the mid-1990s when Hoffenberg and, allegedly, Epstein ran a classic pyramid scheme through Hoffenberg’s Towers Financial Corporation.

The duo allegedly used money from the sale of bonds and securities and promissory notes from early investors to cover losses they incurred on behalf of newer investors and affiliated business, and personal expenses to keep a jet-setting-and-champagne lifestyle.

According to the lawsuit, the duo suffered losses in failed attempts to buy now-defunct Pan American Airways as well as a freight air carrier Emery.

Epstein, 63, a fabulously wealthy Wall Street prodigy, was convicted of soliciting an underage girl for prostitution in 2005 (pictured in court in 2008)

Steven Hoffenberg, himself convicted of a Ponzi scheme in 1995, has sued Epstein claiming that he was an accomplice and helped rip off 200,000 small to mid-size investors out of what could amount to $1 billion, including interests

What’s unusual about the new lawsuit is that Hoffenberg, who also happens to run a major PAC for presidential candidate Donald Trump, is also a convicted felon.

He was sentenced to 20 years in a federal prison for his role in the Ponzi scheme he ran from the late 1970s until 1993, when authorities figured out what was happening.

While prosecutors allegedly offered to reduce Hoffenberg’s sentence in exchange for information about Epstein’s role in the scam, Hoffenberg refused to cooperate.

He served 18 years before being placed on supervised release for three years. He also paid $1 million in fines and was ordered to reimburse investors about $475million.

So far, Hoffenberg has ponied up $200 million.

According to Hoffenberg’s new lawsuit, however, Epstein has been enjoying the spoils of the scam for the past 30 years.

In addition to a luxury townhouse at 9 East 71st Street in Manhattan, Epstein owns a $10.7 million-house in Palm Beach and a private island in the Virgin Islands. That’s where he lives currently, according to the Florida sex offenders registry.

What’s more, Epstein is the CEO of The Financial Trust Company, which runs a hedge fund estimated to be in the $50 billion-range. And if you believe Hoffenberg’s lawsuit, written by Manhattan attorney Alan P. Fraade, Epstein started that business by selling worthless securities for Hoffenberg.

“Mr. Epstein … was a full-time associate and expert consultant for Mr. Hoffenberg in financial services including raising capital by selling securities,” the lawsuit reads.

Epstein’s company, the lawsuit claims, was “created entirely with the monies in excess of $500 million fraudulently acquired through fraudulent Ponzi schemes.”

Epstein, who owns several luxury properties around the world - including his high end New York apartmet, is accused of running a classic pyramid scheme through Hoffenberg’s Towers Financial Corporation

Hoffenberg claims the millionaire had then used the ill-gotten gains to fund his champagne lifestyle (pictured is Epstein's private private Caribbean island, Little St James)

Because he didn’t have a broker’s license, the lawsuit reads, Epstein made his purchases traded stocks and bonds through third parties then used proceeds on himself.

However, Hoffenberg claims in his filing, Epstein wasn’t as good as he believed.

At one point, he lost at total $1.080 million in a failed attempt to buy failing Pan Am months before the downing of Flight 103 over Lockerbie, Scotland, and purchase of a majority shares in Emery air freight.

Hoffenberg accuses Epstein of manipulating Emery’s stock to minimize his losses while costing Tower investors millions.

The lawsuit is for fraud, unjust enrichment, breach of fiduciary duty and negligence. It’s asking a jury to order Epstein to make whole Tower investors as well as pay unspecified damages.

Epstein made news over the past few years for his friendship with Prince Andrew and allowing former President Clinton to use his private jet repeatedly.

In unrelated lawsuit currently pending in Florida, unidentified women who claim they were abused by Epstein in the early 2000s when they were teens claim he made them into sex slaves who’s be passed on to his friends.

In a criminal court in Palm Beach County in 2008, Epstein was accused of having staff members recruiting troubled high school girls in suburban West Palm Beach to travel to his nearby mansion for massages, sexual performances and sex.

The victims claimed a room in Epstein’s waterfront mansion was set up to look like a dungeon.

In an unusually lenient deal with federal prosecutors that sparked allegations Epstein benefited from high-level political protection, Epstein was allowed to plead guilty to charges he procured minors for prostitution.