Madoff’s Accountant Arrested on Charges of Faking Audits

Mar 23rd, 2009 • Posted in: News

Accountant accused of rubber-stamping Madoff’s bogus numbers; also, Madoff denied release from prison while awaiting June sentencing

NEW YORK
Bernard Madoff’s accountant was arrested last week. CBS News reports that CPA David Friehling is not charged with being a part of the Ponzi scheme itself, but rather with “deceiving investors by falsely certifying that he audited the financial statements of Mr. Madoff’s business.”

That particular legal standard, writes CBS’s Andrew Cohen, is causing many other associates of Madoff to “quake in their Guccis” — wondering if they will be held responsible for representations made regarding banking, law, and investments.

Legal filings allege that while Friehling was paid up to $14,000 a month, he only “pretended” to audit Madoff’s business, reports the Independent.

Friehling faces up to 105 years in prison, according to Fox Business.

Meanwhile, Madoff himself last week lost a bid to be released on bail while awaiting his sentencing in June. A three-judge panel concurred with the finding of the judge who accepted Madoff’s guilty plea that Madoff had an incentive to flee and the financial means to do so.

Under a prior agreement, Madoff had been allowed to remain under house arrest in his luxury penthouse until entering his plea.

Sources: Financial Times, Mar. 20 — Independent, Mar. 19 — CBS News, Mar. 18 — Fox Business, Mar. 18.

For more information, see: Related Newsline story, Mar. 16 — Related Newsline story, Mar. 2 — Related Newsline story, Feb. 23 — Related Newsline story, Feb. 2 — Related Newsline story, Jan. 26.

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