Madoff's Ex-Auditor Pleads Guilty
David Friehling, the accountant who audited Bernard Madoff's books, pleaded guilty in Manhattan federal court on Tuesday. Friehling claimed he was unaware of Madoff's Ponzi scheme even though he served as an independent auditor for Madoff's money management business from 1991-to 2008. He told the judge that his biggest mistake was trusting Madoff, according to CNBC.Friehling has pleaded guilty to nine counts of fraud, up from six counts in March, including securities and investor fraud, filing false statements with the SEC and three counts of obstructing the administration of federal tax laws. What's new in the case is the talk of Internal Revenue Service fraud - that he filed individual income tax returns for Bernie Madoff and others, "and the others could be the key here," said Scott Cohn in his CNBC video report. Friehling originally plead not-guilty but changed his plea to guilty and is now cooperating with the govermment.
A New York Times article speculated that tax fraud could be a new angle in the case and that "others" could be other Madoff family members, citing the possibility that Friehling may have filed taxes for other members of Madoff's family. Experts told The Times that the addition of the federal taxation charges could mean that the criminal investigation of the Madoff securities fraud is heading in a new direction toward criminal tax laws, suggesting that the government could go after family members for tax fraud.
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