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Madoff's accountant is charged with fraud
Simon English18 Mar 2009
INVESTIGATORS today charged Bernard Madoff's auditor with fraud in a breakthrough for attempts to prove the world's biggest ever fraudster did not act alone.
David Friehling is the only alleged accomplice in the £46billion ($65billion) investment fraud to have been arrested.
Friehling, 49, ran the obscure Friehling and Horowitz accounting firm which operated out of a unit on an office park in a northern suburb of New York state.
The fact that a giant Wall Street firm like Madoff's used such a tinpot organisation to audit its accounts has been cited as one of the "red flags" of danger that regulators should have spotted to alert them that something was amiss. As Madoff's auditor, Friehling was supposed to be monitoring and checking that the firm's accounts were in order.
But the Securities and Exchange Commission's charge sheet alleges that he failed to conduct any audits of the firm's internal controls.
In a statement, the SEC said Friehling pretended to conduct such audits in financial statements.
It added: "If properly stated, those financial statements would have shown that Bernard Madoff Investment Securities owed tens of billions of dollars in additional liabilities to its customers and was therefore insolvent."
Friehling, who surrendered himself to the authorities, could be sentenced to up to 105 years in prison if convicted.
Reader views (2)
This is the difference between America and this country. They hold those who have bought the country to its knees criminally liable. Ours get awarded with massive payouts for decimating their former place of employment. What's happened to Fred the Shred apart from a lot of hot air for the past few weeks. Has he or any of his ilk being charged with criminal negligence, no! No doubt, lessons will be learnt!!
- Sonia M., st albans, herts, 18/03/2009 18:54
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What about the book keeper, his wife?
- Hugh, Middx, 18/03/2009 17:54
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