Madoff Accountant Arrested
By Cristina McEachernMar 19, 2009 at 02:27 PM ET
It was only a matter of time before more people involved in the Bernard Madoff Investment Securities fraud would come out of the woodwork and now the dominoes might begin to fall.
On Wednesday, federal prosecutors charged David Friehling, the accountant who audited Madoff’s firm, with fraud.
Friehling was the only auditor at the firm of Friehling & Horowitz, which the government says was responsible for auditing Madoff’s firm beginning in 1991.
According to a statement released by the Department of Justice, Acting U.S. Attorney Lev Dessin, said, "Mr. Friehling is charged with crimes that represent a serious breach of the investing public's trust.”
He added, "Although Mr. Friehling is not charged with knowledge of the Madoff Ponzi scheme, he is charged with deceiving investors by falsely certifying that he audited the financial statements of Mr. Madoff's business. Mr. Friehling's deception helped foster the illusion that Mr. Madoff legitimately invested his clients' money."
The charges against Friehling include securities fraud, aiding and abetting investment advisor fraud and filing false audit reports with the SEC. If convinced Friehling could fact a maximum sentence of 105 years in prison.
According to the DoJ statement, Madoff’s firm paid Friehling between $12000 and $14500 per month for his services between 2004 and 2007.
This week the also saw the government’s intent to actively go after the assets of Madoff’s sons and wife.
According to a government filing on Tuesday, Madoff loaned sons Andrew and Mark more than $30 million since 2004. Reports say that the last of the loans – to Andrew for $4.3 million - occurred in October of 2008, two months before Madoff’s arrest.
Prosecutors have also indicated they are looking to seize Ruth Madoff’s jewelry collection which is valued at $2.6 million.
Topics: Regulations
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