Mutual Benefits Con Man Joel Steinger Spent a Lifetime Getting Mobbed Up

Michael Rosen remembers standing in the elevator when he was just 3 or 4 years old. He was with his mother in their condo building, and several adults beamed at him, talking about how cute he was.

He looked up and told them, "Go fuck yourself."

Rosen winces at the memory. He's 38 now, a hotel executive in Miami and the married father of a baby girl, and he's still trying to come to grips with his bizarre and chaotic childhood. He wasn't just a kid who happened to pick up some curse words; the scene was all but planned.

His stepdad, who raised him from age 3, taught him those words. In fact, he fed young Michael vulgarities and obscenities like perverse candy. And that was only the beginning. There was also pornography, prostitutes, federal investigations, lawsuits, and rumors swirling that his dad was a criminal.

He knows now that the rumors were true. Rosen's stepfather was Joel Steinger, the man behind the billion-dollar Mutual Benefits Corp. Ponzi scheme. Rosen's been reading about Steinger's outrageous exploits in the media, including the incredible magnitude of his fraud and his virtual purchase of the Florida Legislature. He eagerly awaits the man's federal fraud trial in Miami.

But before Steinger became infamous, Rosen just knew him as "Dad." And the memories still haunt him.

About the time of the elevator incident, Rosen remembers riding in Steinger's Lincoln through a seedy section of Miami when the man he called Dad pulled up next to a prostitute on the street.

"How much for a blowjob for this kid?" Steinger yelled out.

Rosen says the comment prompted an immediate slap to his dad's face from his mother, who was riding in the passenger seat. But that bit of retribution didn't slow his father.

By the time Rosen was 7, Steinger was showing his stepson pornography on an early Betamax video player. Rosen recalls another of his dad's cars, a Cadillac, that was equipped with a makeshift public address system. As his father drove around town, he would amuse himself by having Rosen sit on his lap and tell him exceptionally obscene curses to yell at people walking along the street.

When Rosen was still in grade school, he saw his dad on television. It was an episode of 60 Minutes, and the subject was a Miami-based securities scam that led to a felony fraud conviction for his father. Rosen remembers fighting another kid at school who said his dad was a crook.

So many process servers came to the house that he was taught never to answer the door. It might be a subpoena to testify in a criminal investigation or the filing of a civil lawsuit against Steinger.

Somehow, though, the elder man stayed out of prison and kept raising his stepson. When Rosen had his bar mitzvah at the Jockey Club in Miami, his father led him to a room where a prostitute was waiting. That was the day Rosen lost his virginity. He knew it wasn't right and says he didn't want to do it, but he was afraid Steinger would belittle him if he didn't go through with it.

Rosen says Steinger spent all of his days in telephone boiler rooms smoking cigarettes, drinking whiskey, and cheating on Rosen's mother. He went from one scam to another, selling bogus commodities, fake diet pizza, whatever he could come up with. And when Steinger was home, he would verbally abuse the boy and his mother, often calling her the c word. Looking back, he realizes his father lacked all form of affection — and he grew up thinking this swaggering, vulgar, criminal existence was normal.

In his 20s, Rosen says, he acted like his father, like an animal. It wasn't until his own marriage went into a tailspin that he realized he needed help. After years of therapy, he has largely gotten past his stepfather, whom he hasn't spoken to in 17 years. He makes a point never to curse in front of his young daughter.

But he's still fighting his past, especially because his stepfather is all over the news these days after masterminding one of the largest scams in Florida history.

Rosen hopes that this time, Steinger is thrown in prison for the rest of his days.

"I've known for years that this man was scum," says Rosen. "I want him to finally be stopped, and I'll do anything I can to help make that happen."

Rosen represents just a tiny bit of the incredible human and financial wreckage Steinger has left in his ugly wake. He has destroyed the lives of friends, relatives, and countless strangers alike. He should have been stopped more than 25 years ago, when he perpetrated the scam that landed him on 60 Minutes.

Some believe that the secret to Steinger's stunningly long life of crime has been his pumping millions into the political process. But long before he secured any help from powerful political friends like former state Sen. Steve Geller and lobbyist Russ Klenet, he had the help of a largely hidden force: the so-called Jewish Mafia, a distinction that has nothing to do with the religion and everything to do with vast Mob profits.

Upon moving to South Florida in 1970, Steinger immediately ingratiated himself into South Florida's underworld. A look at the men he calls friends provides a guidebook to the so-called "Kosher Nostra," the loose confederacy of Jewish lawyers, bankers, and hustlers tied to the Italian Mafia. Steinger, in fact, has boasted that he learned at the feet of legendary mobster Meyer Lansky, who is perhaps the most important underworld figure of the 20th Century.

His powerful friends, in both high and low places, seem to have emboldened Steinger to criminal heights rarely seen. And his own mantra, through it all, seems to be those rude words his stepson uttered in an elevator so many years ago.

Before Joel Steinger had personal piggy banks full of huge amounts of ripped-off cash, he was just a working-class kid from Brooklyn, born on November 10, 1949, the first son of a man who sold books door to door for a living.

Joel's father, Harry, was a financial "roller coaster" who went broke several times, says Joel's cousin Marlene Steinger, who asked that her maiden name be used. Times sometimes were lean for Joel's family, which included mother Ruth and eventually two younger brothers, Steven and Leslie.

Marlene says Harry was scrupulously honest. But his father's ethics meant little to Joel, another close source says. He was frustrated with his dad for not being rich.

"Joel always said that he was angry at his dad for working door-to-door jobs instead of owning his own company," says the source. "He thought he could have been more successful, and that made him bitter toward him."

Still, Harry did well enough to buy a house in the New York City suburbs of Rockland County. At that time, he took the g out of his last name, changing it to "Steiner."

"He thought it sounded less Jewish and more German," says Marlene. "He just thought it would be better since he was living in the suburbs. I didn't agree with it."

All three of his sons would interchange those two last names at different times.

Harry died suddenly of a heart attack when Joel was about 11 years old. Joel, several sources say, stepped into the "man of the house" role quickly.

By the time he graduated from high school, Steinger had fathered at least one son, who was named Michael. He married the mother, Rhonda, but the marriage didn't last long.

"He told her that he couldn't mess up his life by having a wife," says Marlene. "And that was it. He washed his hands of it."

Michael and Rhonda moved to Arizona. Soon after that, around 1970, Joel, his mother, and two brothers sold the New York house and used the proceeds to buy a condo in Hallandale.

It wasn't long before Joel Steinger, then in his early 20s, was mixing with men with reputed Mob ties. And it didn't take long for Steinger to meet perhaps the most powerful gangster of the 20th Century, Meyer Lansky, who also happened to live in a condo in Hallandale at the time.

Before "retiring" to South Florida, Lansky had helped form the modern Mafia with Charles "Lucky" Luciano on the streets of New York. With Bugsy Siegel, he helped create Las Vegas. And he controlled nightclubs and casinos in Havana in pre-Castro Cuba. The character Hyman Roth in The Godfather was modeled after him.

Marlene says Steinger's association with Lansky began through Steinger's brother, Steven, who began an interior design company as soon as he left high school. Once in Hallandale, Steven landed Lansky's wife, Teddy, as a client. Teddy Lansky and Ruth Steinger would go on to become best friends, say several sources.

However they met, Steinger had gained entrée to a criminal mastermind's world, and he ate it up. Steinger, who always fancied himself a bit of a New York street tough (he boasts that he used to be a boxer), was in awe of Lansky. Apparently, though, the aging mobster wasn't enamored of him. It was Steven whom the Lanskys preferred.

"Teddy absolutely adored Steven," says Marlene, who moved in those circles herself for many years. "So did Meyer. Neither one of them cared for Joel at all."

But Steinger found another way to become a member of Lansky's club. He married into it.

Steinger met Bonnie Rosen when he was in his mid-20s. Bonnie had a toddler at the time named Michael whose father had died. Steinger swooped in to fill the role of provider for the family and quickly married Bonnie.

The 1974 wedding was held at the beautiful home of Bonnie's father, Philip Simon, on exclusive Allison Island in Miami. In attendance at the wedding were Teddy Lansky and Meyer Lansky's longtime lawyer David Rosen. The "little man" himself, however, didn't show.

Marlene, who attended the wedding, says there were police cars outside the home conducting open surveillance, watching everyone come and go. "The police were just looking to see who showed up," she said. "That's the reason people said that Lansky didn't show up."

Steinger's new father-in-law, Simon, was reputed to have been an associate of Lansky's. Simon was named in a 1973 book by mobster Vincent Teresa titled My Life in the Mafia. Teresa was a one-time cellmate of disappeared union boss Jimmy Hoffa and testified in a case against Lansky.

He wrote that Simon laundered money through Miami banks for known Mafia members, including Lansky. "Simon was hooked up with Lansky and worked at" Miami National Bank, Teresa wrote. "That bank was used to wash millions and millions of dollars for the mob."

Simon, now 88 years old and retired in Boca Raton, denies he was involved with Lansky. He was a major banker in Miami but insists he never did a thing for Lansky. He said rumors began in early telephone boiler rooms he operated.

"It's all garbage," he says. "I ran phone rooms, and I was the toughest guy in Miami to work for, and I'm proud of that. But I guess some of the people who worked for me started rumors that weren't true."

Simon says he had a terrible feeling about Joel Steinger, even on his daughter's wedding day. He says he walked up to his daughter in her wedding dress and took her aside.

"I want you to look at the class of people that are here," Simon told his daughter. "I don't know why you're doing this. It's not too late to get out of this."

But she wouldn't hear of it.

"I was very upset about that wedding," Simon says. "I knew he was a slimeball."

Once they were married, though, Simon gave Steinger a job at his import-export business, the Wig Corporation of America. The money allowed Steinger and his bride to build a house in Miami.

In the mid- to late ´70s, Simon leased Steinger space in his building equipped as a telephone room where Steinger began operating Crown Colony Commodity Options Ltd. With the new company, he ran one of his first boiler rooms, selling bogus options on commodities. It led to his first felony and the appearance on 60 Minutes. Marlene and others say Steinger said he took the fall for the Mafia bosses. "From that point on, he was never the same," Marlene says. "He was angry at the world and wanted to get back at everyone."

Another source close to Steinger who spoke on condition of anonymity echoes Marlene. "He always says that when he took the felony, he took the fall for the Mafia," says the source.

Simon says Steinger never took a fall for anyone. "He's full of crap," says Simon. "I never had anything to do with Crown Colony. I wasn't familiar with it and didn't want to be. All I cared about was that I got a check at the end of the month" for leasing the space to Steinger.

If Steinger was bitter about his felony conviction, it didn't stop him from associating with men who were notorious for Mafia associations. Chief among those friends was Alvin Malnik, a multimillionaire who was dubbed Lansky's "heir apparent" by Readers Digest magazine after the mobster died in 1983. Although Simon denies a relationship with Lansky, he concedes that Malnik was a client in his banking business.

"When Malnik says jump, Joel jumps," says one source. "Malnik is one of the few people in the world that Joel respects and fears."

Malnik has always denied ties to Lansky, but the record tells another story. In the 1970s, he was involved in a land deal with the sons of mobster Sam Cohen, a close Lansky associate. He was also tried at that time on a federal charge of tax evasion, but the case was dropped when the wiretaps used were declared illegal. As Albert Fried wrote in his groundbreaking 1993 book, The Rise and Fall of the Jewish Gangster in America, the wiretaps traced "in rich detail the character of Malnik's [underworld] associations."

Mob informant Teresa also testified to the relationship. "Al Malnik was an employee of Meyer Lansky," he said, "and the purpose of his association with Meyer Lansky was that Al Malnik would convert illegal cash by laundering it in various real estate ventures."

In 1980, Malnik was banned from the casino business in New Jersey because of his ties to Lansky and other organized-crime figures, a decision that was reaffirmed in 1993. In 1982, Malnik's Rolls-Royce was mysteriously blown up in the parking garage of the Cricket Club in Miami, a high-rise condo he developed where Steinger once lived as a neighbor. No one was hurt.

In his book, Fried wrote that after being "groomed for a place in the gang/syndicate hierarchy," Malnik "disappeared from view." Not quite. Malnik remains a high-profile player in South Florida, best-known for owning the Forge restaurant and nightclub in Miami, a place where regulars once included Frank Sinatra and other members of the Rat Pack. Stars are still drawn to the place, including Jennifer Lopez, Julio Iglesias, Matt Damon, and Mickey Rourke, who worked there as a busboy when he was a teenager.

Now living in a 35,000-square-foot oceanfront mansion in upscale Ocean Ridge in Palm Beach County, Malnik has also made tremendous profits in the shady title loan business. One of his companies, Title Loans of America, has a history of charging such exorbitant interest rates — sometimes more than 250 percent — that former Florida Attorney General Bob Butterworth likened it to "legalized loan sharking."

Malnik's comings and goings — including his high-profile 1995 wedding and his 70th birthday party in 2003 — have been documented in local newspapers. At the latter private affair at the Forge, Malnik sat at the head table with pop icon Michael Jackson, whom he counts as a friend and business associate. Another table was reserved for Arab sheiks with whom Malnik has long conducted business.

Also hobnobbing at the birthday bash was Malnik's good friend Joel Steinger, whom he has known for many years.

The strong association between Malnik and Steinger is undeniable, but its nature is mysterious. Malnik, for instance, popped up in the state criminal investigation of Mutual Benefits. Investigators seized Steinger's address book and found phone calls from Malnik dating to at least 2002.

Another obvious connection between the two men is Miami attorney David Goldstein. Goldstein is one of Malnik's right-hand men, serving as the registered agent for many of his businesses. Goldstein does the same for Steinger and last year loaned him $602,000, according to county records. The reason for the loan isn't clear.

Speculation runs rampant as to what, if any, role Malnik may play in Steinger's business affairs, especially since millions of dollars are still unaccounted for in the Mutual Benefits swindle. Malnik himself, when reached on his cell phone, declined to comment on the relationship.

Malnik indirectly has played a role in keeping Steinger out of prison. Sources say it was Malnik who introduced him to former Watergate prosecutor Richard Ben-Veniste, a close friend of President Bill Clinton's who also recently served on the 9/11 Commission.

It was the start of a special friendship between the con man and one of America's best-known lawyers.

Steinger's cousin, Marlene, says the person who really made the con man's long run possible was the man she calls his "Godfather," Richard Ben-Veniste.

Michael Rosen echoes that sentiment, saying that Ben-Veniste served as one of his lawyers in Steinger's Crown Colony criminal case and has been at his side ever since, including the defense of the billion-dollar Mutual Benefits case.

In the file of the years-long investigation of Mutual Benefits conducted by Florida's Office of Statewide Prosecution, officials marked a folder simply "Richard Ben-Veniste." In it are letters Ben-Veniste wrote on Steinger's behalf and records of meetings he had with investigators.

Sources say Steinger has paid Ben-Veniste handsomely for his services over the years, many millions of dollars. As part of his payment for work in Mutual Benefits, he bought Ben-Veniste a new Mercedes convertible, according to court records.

But the pair have more than just a professional relationship; they are close friends.

Rosen remembers that when Ben-Veniste would come to town, he and his stepdad would stay out all hours, partying it up. Their favorite hangout, say sources, was the Lago Mar Resort in Fort Lauderdale. "Ben-Veniste would come to Joel when he wanted to cut loose," Rosen says. "Ben-Veniste is the lowest of the low. You have no idea... and here he is representing us on the 9/11 Commission? It's unbelievable."

Marlene says Steinger even served as best man at Ben-Veniste's wedding. In 2000, Ben-Veniste returned the favor. The Washington, D.C., lawyer was Steinger's best man at his wedding to his third wife, Diana Morrison, held at the Four Seasons in Palm Beach.

Malnik also attended the 2000 wedding and sat at a table with Ben-Veniste, according to a witness.

Marlene says Steinger was boastful about his relationship with Ben-Veniste.

"When he went to Ben-Veniste's wedding as the best man, he was almost uncontrollable," says the 66-year-old Marlene, who lives in Lighthouse Point. "He said to me, 'I can't believe he asked me to be the best man at his wedding. Do you know how important he is?' "

A clue to the answer: Ben-Veniste had been a regular visitor to Clinton's White House and had watched the previous year's Super Bowl at Camp David with the president and a few other close friends. Ben-Veniste, after all, was one of Clinton's great defenders when he served as the Democratic side's chief counsel for the Senate Whitewater Committee.

In the Crown Colony case, Steinger was sentenced to two years of prison and five years of probation, banned from dealing in securities for eight years, and fined an unspecified amount. But Rosen and other sources say Steinger escaped prison time and instead stayed nights for a time in a halfway house at the Salvation Army on Broward Boulevard in Fort Lauderdale.

Rosen and other sources say he boasted about bribing the Salvation Army clerk to so he could get out early.

"He was very proud about that," says Rosen, who was about 10 at the time. "He would come home early all the time with a bag full of donuts."

While Steinger was on probation, he wasn't allowed to travel out of South Florida. The problem was that one of Steinger's greatest passions was horseracing, and he owned thoroughbreds in Ocala that he wanted to see. Rosen says that when he got his learner's permit at 15, Steinger made him drive him to Ocala on weekends.

"He would make me drive in the right-hand lane very slow, at or below the speed limit, so we wouldn't get pulled over," he says. "That's how I learned to drive."

He says he didn't see his stepdad much otherwise, because he was always in his boiler rooms, whipping up money with phone calls and booze. "It was all work and bottles of Chivas," Rosen recalls. "And the only thing I heard in my house was cursing and fighting. He used to come home drunk. He would leave to work, wouldn't come home until 1 or 2 in the morning. My mother would find matches with women's phone numbers on them, lipstick. He had disgusting Christmas parties with hookers and cocaine. My mother would flip out about it, but there was nothing she could do."

Steinger's former father-in-law, Simon, says he has heard the stories. "If I see this guy on the street, I wouldn't even spit on him," says Simon. "He's sick, sick, sick."

Rosen's allegations about his stepfather's behavior are supported in public documents. State investigators summarized one former Mutual Benefits employee's description of the workplace like this: "MBC was very disorganized, there was lots of swearing, was very smoky, fraught with office scandals, all of which contributed to high turnover."

Another former employee says Steinger and his sales agents had a habit of hiring prostitutes while they partied.

Court records from his recent divorce from Diana Morrison involving their 7-year-old son contain eerie similarities to Rosen's unsavory childhood recollections. During the divorce, his ex-wife filed a complaint with the Department of Children and Families. From the July 6, 2007, DCF report:

"In the past the father has watched pornographic movies with the child. The child said, 'Daddy screams and says bad words to me all the time.' As a result, the child is scared of the father. There is a history of domestic violence in the home. The child has witnessed this."

Steinger has been using his well-known divorce lawyers, Bill and Karen Amlong, to try to gain custody of his son. Steinger, who currently has half-custody, denied any of this happened and said the allegation was fabricated by his son at the behest of his mother.

But the report rang all too familiar for Michael Rosen, who last saw his stepfather in 1992, when the con man, with Ben-Veniste at his side, visited a restaurant where Rosen was working. "That man shouldn't be allowed to care for any child," Rosen says. "He's just a terrible human being."

Messages seeking comment left at Ben-Veniste's office at the Mayer Brown law firm in D.C. were not returned.

The son whom Steinger didn't raise, Michael Steinger, became a lawyer and moved to West Palm Beach in the early 1990s. He and his father reunited. The son's personal-injury law firm, Steinger, Iscoe & Green, advertises heavily on television, billboards, and even taxicabs.

It seems that Michael Steinger, who recently put up half a million dollars to help cover his dad's prison bond, has also recently run into some controversy. In a civil suit reported on by TheStreet.com, Steinger has been accused of participating in an alleged health-care scam. No charges have been filed.

If there is a defining trait about his father, Joel Steinger, it is that he never seems to change — he just keeps doing what he does. And what he does is swindle.

As part of his Crown Colony sentence, Joel Steinger was banned from trading securities for eight years. No matter — he just jumped into all kinds of businesses using the boiler rooms to sell whatever he could come up with.

With a company he started in the early 1980s called Tara Petroleum, Steinger began selling interests in dry oil wells. The Securities and Exchange Commission investigated him again in connection with Tara and in 1989 permanently barred him from selling securities and fined him an unknown amount. His brother Leslie received the same punishment for his involvement, but numerous sources say Leslie was simply an extension of Joel. Ultimately, Joel would come to control both of his brothers and use them to run his burgeoning empire and move his millions from one entity to another.

And he wasn't kind to them.

"He would belittle both of them," says one source. "He would make fun of Steven being gay and just humiliate them all the time. But they would take it because of all the money."

A trick the SEC used against Steinger was to investigate him and simply order him not to violate federal rules anymore. It was an exercise in futility, since he simply moved on to other scams. In the same year he was barred from selling securities, he devised a business called Original Diet Pizza Co. Inc. Rosen says his former father showed him the secret of how he could "make" a delicious diet pizza to lure in investors.

"He marketed this as a 'revolution' in pizza," says Rosen. "But he told me that the pizza they used was from Sbarro. They'd just buy the pizza at the Sbarro in the Galleria Mall in Fort Lauderdale, wrap it up, and pretend like it was their diet pizza." The pizza business, not surprisingly, ended in a flurry of bitter lawsuits beginning in 1990, but it made Steinger some cash.

In 1991, Steinger started a business called Galaxy Wholesale Corp. through which he bought huge quantities of groceries in Puerto Rico and resold them in America. Marlene and her husband, David, invested $310,000 in the business, which Steinger operated out of an office on Oakland Park Boulevard. He also had two friends invest the same to make it a total of nearly $1 million.

Marlene served as the company's bookkeeper and says it made legitimate money. But then she noticed the numbers weren't adding up and began suspecting Steinger was skimming money. She says her worst fears were realized when she and her husband took a vacation and came back to find the offices empty.

Steinger had taken off with everything, including a Jaguar convertible that was owned by the company, and all of the investors' money, Marlene alleged in court.

"He just can't stay on the straight and narrow," says Marlene. "The business was fabulous, the money was coming in, and all of the sudden, we realized there was money missing. We left on vacation, and all of the sudden, there was no office. It was gone. No telephone number, nothing. I tracked him down, and we had a repo guy take the car back. I would have loved to have seen his face when he saw there was no car."

That may have been the only moment of satisfaction, though. She and her husband sued Steinger in state court in 1993. She says one of the partners got their money back, but everything else was lost. Although it didn't financially devastate the well-to-do couple, she says her husband, a retired property manager, was emotionally wiped out by the experience and died soon after.

"Joel destroyed my husband," she says. "As far as I'm concerned, he killed him. He ruined my husband's life. I have never wished anybody harm in my life, but I hope they lock him up and throw away the key."

About the time the Galaxy suit was winding its way through court, Steinger heard about a new business, the viatical industry. The idea was simple if a bit morose: Buy life insurance policies from dying AIDS patients and sell them to buyers who would collect the premiums when the sellers died.

The idea was that the AIDS patients could enjoy the money before they died and investors could make a killing. It was another "legitimate business" Steinger decided to enter.

But it wouldn't stay legitimate for long.

"Joel has nine lives," says Marlene. "He just keeps coming back."

Next week: Steinger buys politicians and bilks a billion.

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