Washington - Disgraced financier Bernard Madoff's accountant
was on Wednesday arrested and charged with securities fraud, the
Justice Department said.
David G Friehling, 49, surrendered to authorities Wednesday
morning and is the first accused accomplice of Madoff to be arrested
since the 50-billion-dollar scandal came to light three months back.
An accountant for Bernard L Madoff Investment Securities LLC,
Friehling faces a maximum 105 years in prison.
He wasn't charged with knowledge of Madoff's 'Ponzi' scheme, under
which the financier was able to offer his investors handsome returns
by continually collecting fresh funds from new clients rather than
from any actual profits earned.
But he was charged with 'deceiving investors by falsely certifying
that he audited the financial statements' of Madoff's business, said
Lev L Dassin, acting US attorney for the southern district of New
York.
'Mr Friehling's deception helped foster the illusion that Mr
Madoff legitimately invested his clients' money,' Dassin said in a
statement.
Prosecutors said Friehling failed to conduct audits that complied
with accepted accounting principles and standards.
'As a purported independent auditor, Friehling had a fiduciary
responsibility to investors, and a legal obligation to regulators, to
report the truth,' said Joseph M Demarest, FBI assistant director-in-
charge.
'He did little or no testing, no verification of the 'facts' he
certified. His job was not merely to rubber-stamp statements he
didn't verify,' Demarest said.
Madoff, 70, pleaded guilty in a lower Manhattan federal court last
Thursday to all 11 criminal counts related to a 50-billion-dollar
fraud and could be sentenced to 150 years in jail for one of the
largest financial swindles in history.
He is to be sentenced on June 16.
'As I engaged in my fraud, I knew what I was doing was wrong, even
criminal,' Madoff said in his plea, adding that he 'knew this day
would inevitably come' after he found himself unable to wind down the
so-called Ponzi scheme.
The investor was jailed after his plea. He had been under house
arrest since January at his luxurious Upper East Side Manhattan home
on 10-million-dollars bail - a court decision that provoked outrage
among his many victims.
Madoff was charged with securities fraud, mail fraud, wire fraud,
three counts of money laundering and filing false statements with the
Securities and Exchange Commission.
USA
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