The body of the 46-year-old actor was found yesterday in his New York City apartment, with reports claiming he overdosed on heroin.

Police confirmed that he was surrounded by bags of the drug and still had a needle in his arm when the body was discovered.

Despite being sober for 23 years, sources close to the star have spoken about his on-going battle with addiction.

"He was always quite intense, a little bit paranoid and troubled. Addiction was always going to be a constant struggle for him but this is so unexpected," an insider told FOX411. "He was an incredibly knowledgeable person and so concerned with problems and issues around the world. He was one of those people with such an awakened mind he couldn't switch off."

The website has also reported that police are trying to track down a surveillance video at an ATM machine, which they believe could hold a connection to the star's death.

A man has come forward to say he saw Philip at the bank machine with two men the night before his death, in what the witness believed to be a drug deal.

"A man told police he saw the actor withdraw large amounts of cash at an ATM at a bank near Hoffman's West Village apartment at about 8pm Saturday night. He said he saw Hoffman hand over the cash and appear to purchase drugs from two men, both wearing messenger bags, who appeared to be working together," reports FOX411.

He also commented that the Oscar-winning actor looked "very sweaty".

It has been alleged that Philip was spending as much as $10,000 on heroin and painkiller Oxycontin a month prior to his death.

"He just bought five bundles of dope last week," an insider told RadarOnline. "Heroin is one of the cheaper drugs, but Hoff wasn't buying the cheap stuff. Still, to be spending ten grand, he was using hard."

The website states that there are ten bags of heroin in a bundle.