Accountant for Bernard L. Madoff Investment Securities, LLC Pleads Guilty in
Manhattan Federal Court to Fraud and Tax Charges
NEW YORK, Nov. 3 /PRNewswire-USNewswire/ -- Preet Bharara, the U.S. Attorney
for the Southern District of New York, Joseph M. Demarest, Jr., the Assistant
Director-in-Charge of the New York Field Division of the FBI, and Patricia J.
Haynes, the Special Agent-in-Charge of the New York Field Office of the
Internal Revenue Service (IRS), announced today that David G. Friehling, the
accountant for Bernard L. Madoff Investment Securities, LLC (BLMIS), pleaded
guilty in Manhattan federal court before U.S. District Judge Alvin K.
Hellerstein. Friehling pleaded guilty to a nine-count superseding information
charging him with securities fraud, investment adviser fraud, four counts of
filing false audit reports with the U.S. Securities and Exchange Commission
(SEC), and three counts of obstructing or impeding the administration of the
internal revenue laws. In addition to pleading guilty, Friehling has agreed to
cooperate with the government in its ongoing investigation of Bernard Madoff's
fraud.
Friehling, 49, faces a statutory maximum sentence of 114 years in prison. He
is also subject to mandatory restitution and faces criminal fines up to twice
the gross gain or loss derived from the offense. Moreover, pursuant to the
cooperation agreement entered into with the Government, Friehling has agreed
to forfeit to the United States $3,183,000 (the Forfeiture Money Judgment),
representing the total amount of compensation he received from BLMIS for his
accounting and tax services, plus the amount that he, his wife, and his
children withdrew from their BLMIS investment advisory accounts. Friehling
also agreed to forfeit his interest in certain real properties, to the extent
that those properties constitute, or were derived from, the securities fraud
charge to which he pleaded guilty. The forfeited real properties will be used
to partially satisfy the Forfeiture Money Judgement. The statutory maximum
sentences for each of the charged offenses are set below.
Following the guilty plea, Judge Hellerstein released Friehling on a $2.5
million bond on the condition that the bond be co-signed by eight financially
responsible individuals and secured by equity in five properties owned by the
co-signers valued between $1 million and $1.2 million. In addition,
Friehling's travel is restricted to the Southern District and the Eastern
District of New York. He is required to maintain land line telephone service
and will continue to be subject to regular pretrial supervision. Friehling's
wife was required to surrender her passport. (Friehling had surrendered his
passport at the time of his arrest.)
Judge Hellerstein set a sentencing control date for Friehling on Feb. 26,
2010, at 11:00 a.m.
U.S. Attorney Preet Bharara said, "David Friehling was one of the key enablers
of Bernard Madoff's historic fraud. With his guilty plea, Friehling has taken
responsibility for his crimes and will now assist us in holding others
accountable for their involvement in Madoff's epic fraud against so many
victims."
Mr. Bharara praised the investigative work of the FBI and the IRS. Mr. Bharara
also thanked the SEC for its assistance.
Assistant U.S. Attorneys Marc Litt, Lisa A. Baroni, William J. Stellmach,
Barbara A. Ward, and Sharon Frase are in charge of the prosecution.
SOURCE U.S. Department of Justice
Yusill Scribner, Rebekah Carmichael, or Janice Oh, all of the U.S. Department
of Justice, +1-212-637-2600
