Madoff accountant faces jail term
Thursday 19 March 2009
The accountant for Bernard Madoff has become the second person to be charged over Wall Street's biggest swindle. David Friehling faces up to 105 years in jail for criminal fraud, and his family firm, Friehling & Horowitz, also faces civil charges by the US Securities and Exchange Commission.
Mr Friehling was paid up to $14,000 a month by Madoff but only "pretended" to audit his business, the legal filings allege. After Madoff turned himself in last December, finance professionals said his use of such a tiny audit firm, based in a suburb of New York, should have been a red flag to investors. Investigators from the SEC and the FBI believe Madoff had not invested his clients' money in a single share for more than 20 years. Cash from new clients was used only to pay investors who cashed out. The total of $65bn that Madoff's thousands of clients believed was theirs was a fictitious number, and most can expect to have lost almost all the money they entrusted to the swindler.
Prosecutors are going after assets held in the name of Madoff's wife, Ruth, who formally owns most of their homes and yachts. That includes Mrs Madoff's $2.6m of jewellery and her husband's designer watches.
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