The accountant in Bernard L. Madoff's giant Ponzi scheme, David
G. Friehling, received a relatively light sentence of home
detention but no additional prison time Thursday because of his
cooperation with prosecutors.
In Federal District Court in Manhattan, Judge Laura Taylor Swain
sentenced Mr. Friehling, 55 years old, to two years of supervised
release, one of those in home detention, and several hundred hours
of community service.
She cited his extensive cooperation with prosecutors in
unraveling Mr. Madoff's decadeslong fraud.
Mr. Friehling, who had been the outside auditor for Mr. Madoff's
securities firm and handled the personal tax accounting for Mr.
Madoff and his sons, pleaded guilty in 2009 to nine criminal
counts, including securities fraud, investment-adviser fraud and
violations of tax laws.
Mr. Madoff, whose scheme cost about $17.5 billion in losses for
customers around the world, is serving a 150-year sentence in
federal prison.
In the unlikely cast of characters behind the largest Ponzi
scheme ever uncovered—a number of Mr. Madoff's closest
confederates in his firm had no college degree and little to no
financial experience before joining his firm— Mr.
Friehling fit in well.
Mr. Friehling had inherited the Madoff account from his
father-in-law, Jerome Horowitz, who had worked for Mr. Madoff for
decades, and he worked out of a storefront office as a sole
practitioner in New York state. According to court documents, he
barely reviewed the Madoff Securities reports and documents he
received and didn't verify the information on assets, bank accounts
or earnings.
Randall Jackson, an assistant U.S. attorney, said in a
sentencing memo to the court that "Friehling's criminal abdication
of his auditing duties was one of the biggest contributors to the
perpetuation of the Madoff Ponzi scheme."
Mr. Jackson added, "But for Friehling's rubber stamping of
Madoff Securities, it is almost certain that the fraud could not
have continued for nearly as long as it did."
But, Mr. Jackson said, "Friehling has been a model witness and
cooperating defendant" and he provided "exceptional testimony" in
trials of Mr. Madoff's staff. "Friehling is that rare defendant who
has experienced deep and true remorse for his actions and their
impact on others," he wrote.
Mr. Jackson also noted Mr. Friehling's contention that he was
unaware of the fraud because he hadn't reviewed the firm's
documents.
Write to James Sterngold at james.sterngold@wsj.com
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