Page last updated at 20:44 GMT, Tuesday, 3 November 2009

Madoff's accountant admits fraud

David Friehling
Friehling has pleaded guilty to four charges

The long-term accountant of disgraced US financier Bernard Madoff has pleaded guilty to fraud charges.

David Friehling, 49, has admitted four charges in total, but at the same time denied any knowledge of Madoff's giant $65bn (£40bn) investment fraud.

Madoff, 71, is serving a 150-year sentence after pleading guilty at his trial back in June.

Friehling, who looked after the books of Madoff's company for 17 years, has been allowed to remain on bail.

He is now due to be sentenced in the New Year.

'Unaware'

Madoff organised a type of fraud called a Ponzi scheme. This works by paying early investors with the money of new clients, rather than any funds made through actual investments.

Madoff arriving for Thursday's court hearing
Madoff has insisted he acted alone

"At no time was I aware that Mr Madoff was engaged in a Ponzi scheme," Friehling told the court in Manhattan.

"I never had contact with investors and never acted as a feeder to investors."

Friehling has pleaded guilty to securities fraud, investment adviser fraud, making false statements to the US financial watchdog - the Securities and Exchange Commission - and breaking tax laws.

He could face a prison sentence of up to 108 years, but may get a lesser sentence because of his cooperation with investigators.

Friehling is one of the three people who have so far faced criminal charges in connection with the Madoff fraud.

The other two are Madoff himself, and Madoff's former chief financial officer Frank DiPascali.

DiPascali pleaded guilty to 10 fraud charges in August and is also due to be sentenced early in 2010.

Madoff has always insisted that he acted alone.



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