Madoff Auditor Charged

Submitted by Melissa Hoffmann on Wed, 03/18/2009 - 12:24

Bernie Madoff's auditor, David G. Friehling, is now the first person besides Madoff to be charged in connection with the convicted fraudster's multi-billion dollar scam.

Read the SEC release or complaint. Also, courtesy of the New York Times, view the court documents related to both criminal complaint and a civil case against Friehling brought by the Securities and Exchange Commission.

Friehling, 49, Madoff's accountant for more than a decade, has been charged with securities and investment adviser fraud and surrendered to federal authorities this morning. He was charged in a six-count criminal complaint that accused him of one count each of securities and investment adviser fraud and four of making filing false filings to the Securities and Exchange Commission from the early 1990s to the present. Friehling, who faces a maximum 105 years in prison, isn’t accused of knowing about Madoff's scheme.

The SEC alleges that Friehling enabled Madoff's Ponzi scheme by falsely stating, in annual audit reports, that Friehling & Horowitz audited Madoff's financial statements pursuant to Generally Accepted Auditing Standards, including the requirements to maintain auditor independence and perform audit procedures regarding custody of securities. Friehling's and his family's personal accounts at Madoff's firm reportedly had an accumulated balance of more than $14 million in November, and withdrawals from the largest of these accounts are estimated to have totaled over $5.5 million since 2000 -- information the SEC points out in its 28-page complaint.

Friehling's former partner in his small storefront accounting firm in New City was Jerome Horowitz, his father-in-law, who has been suffering from cancer and died a few days ago, according to media reports.

Friehling is a former Rockland Chapter president of the NYSSCPA. He was expelled from both the AICPA and the NYSSCPA in a joint action.

Bookmark/Search this post with:

D Frehling vis a vis Madoff

Submitted by slattax (not verified) on Thu, 03/19/2009 - 20:56.

D Freihling is INNOCENT until a Jury of His peers determines his guilt or innocence

All This Talk is destructive to the reputation of a prson

Let the Law proceed an stop the short cuts

Expulsion from AICPA is premature

D. Frehling

Submitted by Anonymous (not verified) on Thu, 04/02/2009 - 12:00.

Do not make me laugh - -he did not audit Madoff's books and records and what is worse violated the independence rules by ivesting in his company. He should be in a jail cell. And by the way was expelled by the AICPA.

Friehling's innocence is garbage

Submitted by Anonymous (not verified) on Sat, 03/21/2009 - 17:23.

May Jerome Horowitz rest in peace.

Jerry did not detect a fraud over thiry years. A Boy Scout with no accounting credits could have identified problems. Bernie's middle name is BOGUS.! That's a fact that makes him guilty of big time crimes.

David Friehling did not detect a fraud over a decade. Ditto.

This is gross negligence, well beyond minimum security prison stuff. Madoff, Friehling and many others need to suffer big time.

Since 1970's the APB has disappeared, FASB has issued hundreds of statements, interpretations, AICPA SAS's etc. etc. These men are clean until we prove in court their work is garbage.

Take it from an honest CPA in Pittsburgh, there work smells worse than the NJ meadowlands ever did and they make me sick. This country is full of irresponsible legislators, regulators, financiers, bankers and CPA's ignoring the public trust.

Hey, family and friends-receiving stolen property is a crime too.

The New York State Society of Certified Public Accountants (NYSSCPA) encourages you to add a comment to this discussion.  You may not post any unlawful, threatening, defamatory, obscene, pornographic or other material that would violate the law.  Please note that NYSSCPA reviews all comments prior to posting. NYSSCPA may edit comments for clarity or to keep out questionable or off-topic material.  All comments should be relevant to the post and remain respectful of other authors. To view the full “NYSSCPA Blog Terms and Conditions,” click here.