Madoff's Accountant Charged With Securities Fraud, Other Crimes

Madoff's Accountant Charged With Securities Fraud, Other Crimes - 3-19-2009 , Class Action News, Class Action, Securities News, shareholder class action, claim, litigation, securities action, common stock'>

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Madoff's Accountant Charged With Securities Fraud, Other Crimes
Mark Hamblett

New York Law Journal. March 19, 2009
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EXCERPT: A small-town accountant Wednesday became the first person to join Bernard L. Madoff in facing criminal charges in connection with Madoff's vast Ponzi scheme. In a complaint unsealed Wednesday, federal prosecutors accused David G. Friehling, 49, of New City, N.Y., of securities fraud and other offenses for failing to conduct audits and deceiving investors as he provided audit services to Madoff's investment services business. A state-licensed certified public accountant, Friehling and his firm were retained by Madoff from 1991 to 2008. Friehling surrendered Wednesday morning. He was released on bail in the afternoon after making his initial appearance in United States v. Friehling, 09-mg-729, before Southern District of New York Magistrate Judge Theodore Katz. Assistant U.S. Attorney Lisa A. Baroni said in court that the government had agreed to a bail package under which Friehling would be released on a $2.5 million personal recognizance bond secured by four pieces of property and cosigned by four financially responsible persons. His travel is restricted to the Southern and Eastern districts of New York and the District of New Jersey. A pretrial conference has been scheduled for April 17. "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," Acting U.S. Attorney Lev Dassin said in a statement. "Mr. Friehling's deception helped foster the illusion that Mr. Madoff legitimately invested his client's money." Friehling's "job was not merely to rubber stamp statements, he didn't verify," according to a statement by Joseph M. Demarest, FBI assistant director-in-charge. "Simply put, Friehling failed to do his job, and lied to investors and regulators in saying he did." The Securities and Exchange Commission filed a companion civil suit against the accountant, Securities and Exchange Commission v. Friehling, 09 civ. 2467…

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