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

Israeli Hedge Fund Harnesses Big Data

Jul 28 2014 | 8:10am ET

Apica Green is a multi-million dollar Israeli hedge fund that is based in Tel Aviv...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

Compelling Opportunities In The Alternatives Space

Jul 29 2014 | 9:33am ET

In an environment where many asset classes seem expensive by historical standards...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note