Madoff Accountant Refuses Deal; 'Not Guilty' to Fudging Books

July 17, 2009— -- The accountant accused of helping Bernie Madoff hide his massive Ponzi scheme pleaded not guilty to the charges today in federal court.

David Friehling apparently rejected the plea deal offered by federal prosecutors who sought his help in unraveling the multi-billion dollar Madoff scam. Both Friehling's lawyer, Andrew Lankler, and federal prosecutors declined to comment on the break down in the negotiations.

Prosecutors say for about $180,000 a year, Friehling agreed to let Madoff use his name and standing as a certified public accountant to mislead the SEC and investors for at least 17 years. Investigators say Friehling simply signed blank accounting reports and SEC documents that Madoff and his associates would fill in with false statements about the firm and its assets.

Click here to go behind the scenes of Brian Ross' investigation into Bernie and Ruth Madoff.

Friehling was the only full time employee of his accounting firm, Friehling and Horowitz, which operated out of a small strip mall in a New York city suburb.

Friehling took over the Madoff account from his father-in-law, Jerome Horowitz, who began doing the books for Madoff in the 1960s.

Horowitz died on the day Madoff pleaded guilty in March.

Friehling was allowed to remain free on bail while awaiting trial.