Another Bernard Madoff associate is making headlines. Yesterday, said CNN, David G. Friehling, 49, Madoffâ€™s â€œlong-time accountantâ€ pleaded guilty and agreed to a nine-count plea. The admission included securities and investment advisor fraud, making false filing with the Securities and Exchange Commission (SEC), and tax law violations, said CNN.
“I am truly sorry for the suffering of all my victims,” Friehling told the court, quoted CNN, which noted the accountantâ€™s family lost about a-half million dollars with the disgraced financier. Friehling argued that he “committed these crimes as an independent auditor,” not as part of Madoffâ€™s historic and massive Ponzi scheme, said CNN.
Madoff is now spending 150 years in prison for orchestrating a massive Ponzi scam estimated to have cost duped investors an incomprehensible $65 billion. Meanwhile, the SEC has come under intense fire for apparently missing warnings that something was amiss with Madoffâ€™s investment advisory business.
District Judge Alvin Hellerstein told Friehling that, as part of the arrangement, he is required to provide “any tangible evidence” requested of him by either the U.S. attorney, the FBI, or the IRS concerning the ongoing Madoff investigation, reported CNN. Irving Picard, the court-appointed trustee charged with liquidating Madoffâ€™s assets, has identified some 2,335 accounts with total losses of over $21 billion.
According to federal prosecutors, Friehlingâ€™s accounting firmâ€”Friehling and Horowitzâ€”was, in fact, the â€œaccounting armâ€ of Madoffâ€™s scheme from the early 1990s to December 11th, when Madoffâ€™s scam collapsed, wrote CNN. Reported CNN, Friehling developed the firm’s “certified and purportedly audited financial statements, including balance sheets, statements of income, statements of cash flows, and reports of internal control,” according to a complaint filed in March, said CNN.
Currently, Friehling is free on $2.5 million bond and is scheduled for sentencing on February 26; he could be sentenced to as many as 114 years in prison, reported CNN; however, the recent plea could lead to a reduced sentence. “I’ll be looking at the extent of your cooperation when devising a just sentence for you,” Hellerstein said, quoted CNN. Friehling graduated from Cornell University’s School of Industrial and Labor Relations and became a CPA in 1987, said CNN, which added Friehlingâ€™s wifeâ€™s father, a Madoff employee for decades prior, introduced him to Madoff in the 1980s.
Picard told the press that he has, so far, located $1.4 billion and continues to work on additional lawsuits for return of funds likely made by other investors who were unaware of the scam. â€œThere definitely will be further lawsuits,â€™â€™ Picard said, but noted that his office would not pursue those at risk of losing their homes or suffering from serious medical conditions, reported Boston.com. â€œWeâ€™re not going to be suing people who donâ€™t have money,â€™â€™ Picard said.
To date, more than $534 million has been paid out 1,368 victims of the massive Bernard Madoff Ponzi scheme. Those funds, said Boston.com in a prior report, were paid out of a national fund. The fund insures against failed brokerage firms, said Picard.