David Friehling, Bernard Madoff's accountant of almost 20 years pleaded guilty today to perpetuating Madoff's scheme and admitted that he failed to properly audit the convicted conman's investment advisory firm and helped him lie to the Securities Exchange Commission and the Internal Revenue Service.
"In what was surely the biggest mistake in my life I placed my trust in Bernard Madoff," said Friehling, who was released on bail today.
Click here to go behind the scenes of Brian Ross' investigation into Bernie and Ruth Madoff.
Friehling expressed remorse and apologized to the victims "for the role I now know I played" in Madoff's operation and admitted that he did not independently investigate Madoff's claimed assets or perform any of the other responsibilities of an auditor.
Friehling, 49, withdrew his not guilty plea and entered the plea during a Manhattan Federal Court hearing before Judge Alvin Hellerstein that lasted more than an hour.
Friehling was charged with nine counts related to his failure to properly audit Madoff's investment advisory firm and his help to Madoff in filing false personal tax returns.
Retained for 17 years by Bernard Madoff Investment Securities, the Rockland County, New York accountant claimed "at no time was I ever aware that Bernard Madoff was engaged in a Ponzi scheme."
He said that he, his family and his father had lost their life's savings and he had lost his pension by investing with Madoff.
Friehling Could Face 114 Years Behind Bars
Friehling also said he never disclosed in his audits that his independence was compromised because accounts in his wife's name were held by Madoff.
Married for 27 years, the father of three children, the tax accountant could face 114 years if he serves maximum sentences consecutively, which is rarely the case. His cooperation, if satisfactory, would likely mitigate against such a harsh sentence.
Upon leaving the federal court at 500 Pearl Street, a crowd of photographers and reporters descended upon Friehling, a soft-spoken, olive-skinned man with brown, close cropped hair.
As security guards blocked reporters and photographers and pushing and shoving ensued, Friehling ducked his head into a waiting white car and was driven off without answering media questions regarding his role in Madoff's $50 billion scheme. Security guards knocked at least three photographers to the ground.
No victims spoke at the hearing at which he admitted committing securities fraud, investment advisory fraud, submitting false filings to the SEC and obstructing and impeding the Internal Revenue Service.
"I am prepared to accept responsibility for my conduct," said Friehling, for "suspending my judgment" and "committing the crimes."
In a related matter, the SEC announced that Friehling's firm had agreed as part of a settlement not to contest the SEC's charges that they enabled Madoff's fraud by falsely stating they audited the convicted fraudster's financial statements in accordance with the relevant accounting and auditing standards.