Madoff accountant pleads guilty in Ponzi scheme, but will he sing?
Filed under: People, Investing
Bernard Madoff's former accountant David Friehling pleaded guilty Tuesday, according to a report from the Associated Press. Will he stay silent like Madoff or will he spill his guts to minimize his jail time? Friehling (pictured) was the longtime auditor for Madoff, and was the first person charged after his boss in the epic Ponzi scheme, but so far, he appears to be keeping silent. Friehling pleaded guilty to charges that are punishable by up to 108 years in prison. It is unclear whether he plans to expose what he knows in a bid to get leniency and a reduction of his jail time.
Frank DiPascali, the former chief financial officer for Bernard Madoff's firm, pleaded guilty in August. He's cooperating with prosecutors and hoping for leniency, but faces a maximum of 125 years on charges of conspiracy, securities fraud, mail fraud, wire fraud, investment adviser fraud, two counts of falsifying the books of a broker dealer, international money laundering, perjury and federal income tax evasion.
Prosecutors could ask for a similar sentencing arrangement for Friehling. Whether they do or not will depend on how cooperative he has been and whether they think he can help with future prosecutions.
Identifying the Guilty, Clawing Back the Money
Both DiPascali and Friehling may have more information on the involvement of other Madoff family members. They may also have key information on some of the large investors and advisers that helped Madoff pull off his Ponzi scheme.
In addition to prosecuting those involved in the Ponzi scheme, the government also wants to recover money for those who've lost. So far, more than $534 million has been paid to 1,368 victims of Madoff through the national fund that insures against failed brokerage firms, according to Irving Picard, the trustee appointed to recover assets for investors who lost money with the convicted swindler.
Picard told reporters in a call Monday that so far, he has identified allowable claims totaling $4.43 billion and is still processing thousands of claims filed by alleged victims, according to The Boston Globe. He also has identified 2,335 investment accounts with net losses of $21.2 billion to Madoff.
Some investors made money. Picard and his staff have found 2,568 investors who withdrew more money from Madoff accounts than they invested. These investors could be vulnerable to what are called clawbacks, which means they could be sued for return of some of the money they made. Picard has recovered $1.4 billion so far and expects to file more lawsuits to force the return of money some investors unknowingly made at the expense of others.
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Reader Comments (Page 1 of 1)
11-03-2009 @ 1:06PM
Alan said...
If l invested in stocks and bonds and made money with Madoff why would l have to give any back. I didn't do anything wrong.
Now if l lost money because my portfolio went south then it's my problem. But if l made money and Madoff the thief stole it from me then l will have to pursue him in court.
What was is past!!!!!!!!!!!
The SEC blew it and they should make it up to the loser's.
But what happens if a person lose's a lot of money because of their own bad picks, does he or she get their money back?
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11-04-2009 @ 10:02PM
Dereck Dodson said...
Connect the guy to the two people at: (368)306-3481 and (364)306-3687 and he'll sing like Sonny and Cher, while dressed as Cher! That's a beautiful "Espionage" Charge for the loser!
11-03-2009 @ 1:08PM
steven ruza said...
they should throw everyone who works on wall street in jail. they are all thieves
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11-14-2009 @ 9:04PM
nehu said...
The thieves are in the congress and the senate. They are millionaires but their salaries are under $200,000.
11-03-2009 @ 1:16PM
Alan said...
Wall Street is for people to buy and not to sell. You can pick almost any mutual fund and after 20yrs the fund can show a excellent return.
But who do you know that cashed in a fund and made the kind of money they talk about.
After the taxes and all of the fee's involved you are lucky to break out even!1
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11-03-2009 @ 2:50PM
Mike said...
Gotta admire Friehling's stones to issue clean audit reports for this scam for a couple of decades. Take a tow sack to carry'm around.
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11-09-2009 @ 3:28AM
Cynthia said...
Madoff Accountant Pleads Guilty: http://www.newsinferno.com/archives/13734#more-13734
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11-21-2009 @ 12:15AM
mukraker said...
Bernie, Frank DiPascali, David Friehling and friends will soon be partying 24/7 on the taxpayer dollar. Read this post by a recent former inmate at the same "camp" as Joe Nacchio is currently hanging out at on the grounds of the Federal Bureau of Prison's Schuylkill FCI in Minersville, Pennsylvania:
http://fprison.wordpress.com
This is called "justice" in America.
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