Madoff accountant out on $2.5 million bond

David Friehling faces up to 105 years behind bars on charges he 'rubber stamped' the convicted fraudster's books.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Aaron Smith, CNNMoney.com staff writer

madoff_acct_sketch.03.jpg
If convicted, Friehling could face up to 105 years in prison.
madoff_headshot.03.jpg
Bernard Madoff, shown here in his mug shot, allegedly paid David Friehling to "rubberstamp" his books, Feds say.

NEW YORK (CNNMoney.com) -- David Friehling, accountant for Bernard Madoff, was released on $2.5 million bond after turning himself in Wednesday to face charges that he "rubber stamped" the Ponzi schemer's books.

Friehling was charged with securities fraud, aiding and abetting investment adviser fraud and four counts of filing false audit reports to the Securities and Exchange Commission, according to the U.S. Attorney for the Southern District and the Federal Bureau of Investigation.

If convicted, Friehling, 49, could face a sentence of up to 105 years. His next court date is scheduled for April 17.

"Mr. Friehling is charged with crimes that represent a serious breach of the investing public's trust," said Acting U.S. Attorney Lev Dassin, in a prepared statement.

"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 Dassin. "Mr. Friehling's deception helped foster the illusion that Mr. Madoff legitimately invested his clients' money."

For his services, Madoff's firm paid Friehling about $12,000 to $14,500 per month between 2004 and 2007, the prosecutors said.

Andrew Lankler, a lawyer representing Friehling, declined to comment.

Friehling is the first person after Madoff charged with having some connection to the world's biggest Ponzi scheme.

He was also an investor with Madoff's firm, according to prosecutors. They say Friehling and his wife had an account of more than $500,000.

Madoff appeals for bail

Bernard Madoff is trying to get out of jail again. He has been locked up since March 12, when he pleaded guilty in U.S. District Court to all 11 criminal counts related to his long-running, multi-billion dollar scheme. He has spent the entire time at the Metropolitan Correctional Center in lower Manhattan.

But Madoff believes he should get out of jail until June 16, when the 70-year-old faces sentencing of up to 150 years. On Thursday morning, he is scheduled to appear in the U.S. Court of Appeals for the 2nd Circuit to appeal the revoking of his $10 million bail.

The bail was taken out against his $7 million Manhattan apartment, as well as his wife's properties in Montauk, N.Y. and Palm Beach, Fla. Madoff had lived in luxury with his wife Ruth in the Manhattan apartment since his December arrest, avoiding jail even after investigators caught him mailing more than $1 million worth of diamond-studded jewelry to relatives.

Now, investigators are tallying up Madoff's assets, valued at well over $800 million, so they can be liquidated and allocated to the thousands of victims who entrusted his firm with their money. Investigators are still trying to determine how many people were victimized and how much money was stolen.

In court, Madoff confessed to running a Ponzi-style scheme, where he used fresh investments to pay off his more mature investors, while creating the appearance of legitimate returns. These investors received statements claiming that their accounts had grown in value. But in reality, Madoff said he never bought securities, and therefore never invested his clients' money. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
A cheapskate's guide to tech From ebooks to phone service, here are some tips for living your digital life on the cheap. More
2015 Mustang's asphalt-peeling power goes modern The new Ford Mustang has been upgraded and updated to compete globally - but never fear, it's still a monster. More
15 top executives with $1 salaries Some CEOs and founders agree to salaries of just $1 a year. But once goodies like bonuses and stock options are added in, some of those executives end up taking home many millions of dollars a year. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.