Tuesday, April 21, 2009

Madoff Auditor in Legal Limbo

Once the Madoff fraud came to light, you knew he wasn't the only one going down. As an auditor, you have to wonder what if this stuff I'm looking at is just gibberish. Looks like this guy didn't have that thought. Also from WebCPA:

Bernard Madoff’s accountant, David Friehling, is facing an extra month of uncertainty over his legal status after prosecutors filed a continuance with the court.

Friehling was arrested last month and charged with securities fraud, aiding and abetting investment advisor fraud, and filing false audit reports for his role in Madoff’s estimated $65 billion Ponzi scheme (see Madoff’s Auditor Arrested). The continuance, filed last Friday, gives prosecutors another 30 days to indict Friehling, file further charges against him, or negotiate a plea bargain with him and his attorney.

“The government has requested a continuance of 30 days to engage in further discussions with counsel about the disposition of this case,” said the order, according to Reuters.

Friehling, a partner in the now-defunct New City, N.Y., accounting firm Friehling & Horowitz, took over the CPA practice after his father-in-law, Jerome Horowitz, retired. Horowitz was Madoff’s auditor for 30 years and died the same day Madoff pleaded guilty to 11 fraud charges in March.

Friehling, a past president of the Rockland County Chapter of the New York State Society of CPAs, was expelled from membership in the American Institute of CPAs after an ethics investigation, soon after he was arrested. Friehling is also facing civil charges from the Securities and Exchange Commission, which accused him of merely pretending to audit Madoff’s accounts and filing false audit reports.

Friehling was released on a $2.5 million personal recognizance bond that he had to guarantee with four of his real estate properties. He also had to surrender his passport to authorities as a condition of his bond and agree to restrictions on his travel. He faces up to 105 years in prison if convicted.

2 comments:

StewartRE said...

Completely felt the same way when the Madoff case broke. From an auditors perspective, you have to wonder how such things could happen and continue to happen...but human nature tends to win out every time. Look forward to reading more posts Joel.

Robert
http://www.accountingnation.com

Joel Ungar said...

Robert - thanks for the comment. I think you are the first to leave me one! Hope there are more.