Accountant for Bernard L. Madoff Investment Securities, LLC Charged in an Information with Securities Fraud, Other Offenses

NEW YORK—Lev L. Dassin, the Acting U.S. Attorney for the Southern District of New York, and Joseph M. Demarest Jr., the Assistant Director-in-Charge of the FBI’s New York Field Division, announced today the filing of a criminal information in Manhattan federal court charging David G. Friehling, the accountant for Bernard L. Madoff Investment Securities, LLC (BLMIS), with securities fraud, aiding and abetting investment adviser fraud, and four counts of filing false audit reports with the U.S. Securities and Exchange Commission (SEC). The information also contains an allegation requiring the forfeiture of all of Friehling’s proceeds from the alleged securities fraud.

According to the criminal information filed today before U.S. District Judge Alvin K. Hellerstein:

From 1991 through 2008, Friehling was paid by BLMIS purportedly to audit BLMIS’s financial statements that were filed with the SEC and sent to certain clients of BLMIS. Friehling falsely certified that he had prepared and audited those financial statements, including balance sheets, statements of income, statements of cash flows and reports on internal control, in accordance with Generally Accepted Auditing Standards (GAAS) and in conformity with Generally Accepted Accounting Principles (GAAP).  In fact, he failed to conduct audits that complied with GAAS and GAAP and also failed to test internal controls as required under GAAP and GAAS standards. Friehling also failed to maintain the requisite professional independence from his audit client, BLMIS, because he and/or his wife maintained an account with BLMIS that had a balance in excess of $500,000.

Friehling, 49, is charged with one count of securities fraud, one count of abetting investment adviser fraud, and four counts of filing false audit reports with the SEC. He faces a statutory maximum sentence of 105 years in prison.

Mr. Dassin praised the investigative work of the FBI and thanked the SEC for its assistance.

Assistant U.S. Attorneys Marc Litt, Lisa A. Baroni, William J. Stellmach, Barbara A. Ward, and Sharon Frase are in charge of the prosecution.

The charges and allegations contained in the information are merely accusations and the defendant is presumed innocent unless and until proven guilty.