NEW YORK, May 28 (Reuters) - The former outside auditor for Bernard Madoff’s firm was sentenced on Thursday to a year of home confinement, avoiding prison after cooperating with U.S. authorities investigating Madoff’s multibillion-dollar Ponzi scheme.
U.S. District Judge Laura Taylor Swain in New York also ordered David Friehling to pay his share of a $130 billion joint penalty assessed symbolically to him and other defendants convicted for roles in the fraud.
“I will regret for the rest of my life the role I play in this devastating crime,” Friehling said in court.
Friehling, 55, was the latest individual to be sentenced for his role facilitating the massive fraud, which landed Madoff a 150-year prison term and is estimated to have cost investors $17 billion in principal losses.
Friehling pleaded guilty in 2009 after becoming an early cooperator in the government’s probe of Bernard L. Madoff Investment Securities LLC.
Prosecutors said Friehling, as outside auditor, never conducted a meaningful review of the firm’s finances but instead rubber-stamped information presented to him by Madoff employees. They said he also certified to the U.S. Securities and Exchange Commission that he had used standard accounting practices to audit the firm.
Though Friehling’s actions helped Madoff conceal his massive fraud, he has said he was unaware of the Ponzi scheme at the heart of the firm.
Friehling also served as Madoff’s personal accountant and prepared fraudulent tax returns for Madoff, his brother Peter, and his sons Mark and Andrew, prosecutors said.
He testified as a government witness for several days at the trial of five former Madoff employees, all of whom were convicted in 2014 and sentenced to prison terms ranging from 2-1/2 to 10 years.
Later on Thursday, Craig Kugel, a former employee at Madoff’s firm, is scheduled to be sentenced for enrolling non-employee relatives of workers in the firm’s health care plan.
Kugel played a relatively minor role at Madoff’s firm. In addition to the health care fraud, he pleaded guilty to using a company credit card for personal expenses while employed at Primex, an affiliate of Madoff’s firm.
Kugel testified at the five workers’ trial as well. His father, David, a longtime trader at Madoff’s firm, was sentenced to 10 months of home arrest on Wednesday.
The cases are U.S. vs. Friehling, No. 09-cr-700, and U.S. vs. Kugel, No. 10-cr-228, both in U.S. District Court for the Southern District of New York. (Reporting by Nate Raymond and Joseph Ax; Editing by David Gregorio)