Madoff’s accountant arrested, charged with securities fraud

Friehling was sole proprietor of the Friehling & Horowitz accounting firm. The firm served as auditor to Bernard L. Madoff Investment Securities since 1991, prosecutors said. Friehling, 49, is not accused of knowing about the scheme. Rather, he allegedly deceived investors by falsely certifying that he had audited the financial statements of Madoff’s firm. Besides securities fraud, Friehling is charged with aiding and abetting investment advisor fraud and four counts of filing false audit reports with the SEC. ‘Friehling failed to conduct audits that complied with GAAS and GAAP,’ Acting U.S. Attorney Lev Dassin said in a statement, referring to generally accepted accounting standards and principles. ‘He did little or no testing, no verification of the ‘facts’ he certified. His job was not merely to rubber-stamp statements he didn’t verify.’ Defense attorney Andrew Lankler declined to comment. Friehling, who faces a maximum 105 years in prison, will appear in Manhattan federal court later today after surrendering to authorities this morning. Prosecutors said that as far back at 1995, Friehling lacked ‘professional independence’ from his client by having an account at Madoff Securities with a year-end net equity of more than the $500,000 maximum amount allowed under SEC rules.