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.
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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.
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.