Madoff Accountant Pleads Guilty To Fraud

post from TPMMuckraker on 03 November 2009 05:25:00 PM. © TPMMuckraker

Bernie Madoff's former accountant has pleaded guilty to fraud in connection with his auditing of Madoff's operation. But David Friehling denied that he knew anything about the underlying massive Ponzi scheme, which Madoff has pleaded guilty to orchestrating.

Friehling admitted that he didn't independently audit Madoff's financial statements, saying he took Madoff's claims at "face value." But he said (sub. req.) he put his own and his family's money with Madoff. In what was "the biggest mistake of my life, I placed my trust in Bernard Madoff," he said.

Friehling pleaded guilty to securities fraud, aiding or abetting investment advisor fraud, obstructing the administration of Internal Revenue laws, and making false filings with the SEC.

Federal prosecutors had charged that Friehling -- who said he was introduced to Madoff through Friehling's father-in-law -- created false financial statements for Madoff's firm, over many years. And that he had falsely certified that he had conducted proper audits.

Friehling is cooperating with prosecutors, but nonetheless faces a statutory maximum of 114 years in prison.