David Friehling: Madoff Henchman #1

The Fraud Factory

So, they got the accountant yesterday.  His name is David Friehling and he inherited an accounting business in New City from his father-in-law which he proceeded to turn into a gristmill for the Madoff fraud, falsifying SEC filings and auditing statements for $186,000 in fees a year.

Nice guy, wonder what’ll happen to him in prison?

From the New York Times:
David G. Friehling, who operated from a tiny storefront office in the New York City suburb of New City in Rockland County, was charged with securities fraud and with aiding the investment adviser fraud committed by Mr. Madoff. A related civil case was filed against him and his firm, Friehling & Horowitz, by the Securities and Exchange Commission.

Gets better:

Mr. Friehling, who surrendered at the federal courthouse in Manhattan on Wednesday morning and was released on bail in the afternoon, became Mr. Madoff’s primary auditor in the early 1990s when his father-in-law and partner, Jeremy Horowitz, retired and he took over the two-man firm.

But federal prosecutors and market regulators have consistently said that Mr. Madoff’s fraud began much earlier, at least by the 1980s. In that decade, the Madoff businesses were audited by Mr. Horowitz, who died at age 80 on March 12, the day Mr. Madoff pleaded guilty.

So according to the Feds, Bernie’s original accomplice, Jeremy Horowitz, who helped the Ponzi King get started in the 80’s may be slightly out of reach, so Friehling will have to do.

The question becomes, did Horowitz teach his son-in-law the game, or did Davey Boy pick up the scam naturally.  Another possibility is that he was indoctrinated into the scheme by the Sith Lord himself, Bernie Madoff.  That would’ve been a fun conversation to overhear at the Carnegie Deli.

Anyway, good luck Mr. Friehling, you’re gonna need it!  And Peter and Shana Madoff, compliance officers extraordinaire, you probably shouldn’t be making any plans.

Full Story: Madoff Accountant Charged (NYT)