Legal Commentary

Madoff's Accountant Charged With Fraud

By Jeralyn

Bernie Madoff's accountant David Friehling surrendered today to face charges of securities fraud and other offenses in a criminal complaint (pdf). Friehling served as Madoff's auditor.

In a statement, the SEC said Friehling "merely pretended to conduct minimal audit procedures of certain accounts to make it seem like he was conducting an audit."

Accurate financial statements would have shown that Madoff's securities firm "owed tens of billions of dollars in additional liabilities to its customers and was therefore insolvent," the SEC said.

The Government does not allege Friehling knew of Madoff's illegal Ponzi scheme: [More...]

"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," said acting U.S. Attorney Lev Dassin in a statement. "Mr. Friehling's deception helped foster the illusion that Mr. Madoff legitimately invested his clients' money."

Full post as published by TalkLeft on March 18, 2009 (boomark / email).