A guilty plea on Tuesday by Bernard L. Madoff’s longtime accountant indicates that the criminal investigation of the Madoff fraud may be heading in a new direction — away from securities fraud and toward criminal tax cases.
The accountant, David G. Friehling, admitted in federal court that he had produced the rubber-stamp audits that allowed Mr. Madoff to conceal his enormous Ponzi scheme from regulators for nearly 20 years.
For full article see link: http://www.nytimes.com/2009/11/04/business/04madoff.html?_r=1&ref=business
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What seems so incredibly crazy to me is that this David Friehling (accountant) is said to have worked out of a small store front office in New York City. He had one secretary according to reports. How could any SEC personel reviewing Madoff's books and vast amount of accounts have possibly believed that this small individual accountant was able to handle that amount of work for Madoff? They never even investigated him. It appears that the SEC auditors never did due diligence regarding the acountant, and thus contributed to this situation.
ReplyDeleteI agree with the previous post completely. I think that there is a huge aspect missing from what is known and not known. The accountant is just as guilty as Madoff for ripping off so many people, but I can't help but wonder was there another accountant or did the SEC have an idea at all about what was going on? Being that Madoff's accountant wasn't a huge firm suspicions must have been raised more than once in 20 years.
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