Madoff Business Partner Arrested

Sep 26 2013 | 11:17am ET

An accountant with close ties to Bernard Madoff was arrested this morning, nearly five years after Madoff's $65 billion Ponzi scheme collapsed.

Paul Konigsberg was arrested by Federal Bureau of Investigation agents at 6 a.m. today, at his lawyers' offices in Manhattan. The arrest followed a refusal by Konigsberg's lawyers to grant prosecutors a tolling agreement in the case, which would have allowed them to charge him after the statute of limitations expires in December, The New York Times reports. He is expected to appear in court later today.

It is unclear what charges Konigsberg will face. Konigsberg is a long-time Madoff friend and business associate who was the only non-family member to serve as a shareholder of Madoff's London business. He also counted many victims of the fraud as clients, and did taxes for two Madoff family foundations. Madoff often referred investors to Konigsberg and his now-defuct accounting firm, Konigsberg Wolf & Co., for tax services.

Konigsberg is the 15th person charged in the case. Nine, including another accountant, have pleaded guilty; five others, all former Madoff employees, go on trial in October.

"Paul Konigsburg, a 77-year-old accountant, is an innocent victim of Bernie Madoff," his lawyer, Reed Brodsky, who prosecuted Galleon Group founder Raj Rajaratnam, said. "He looks forward to clearing his good name at trial."

Konigsberg's arrest is not the first time a Konigsberg Wolf principal has run into trouble over Madoff. Accountant Steven Mendelow settled a Securities and Exchange Commission case accusing him of improperly funneling some $90 million to Madoff in 1993.

Prosecutors are continuing their investigations into Madoff's niece, Shana Madoff Swanson, and into JPMorgan Chase.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of