Of all of the red flags surrounding Bernard L. Madoff Investment Securities, one of the most often cited was the confessed hedge fund fraudster’s use of an obscure accounting firm operating out of a storefront office in a New York City suburb.
Last week, that suspicion turned criminal as David Friehling, the sole partner of New City, N.Y.-based Friehling and Horowitz, was arrested on federal fraud charges. He is accused of falsely certifying Madoff’s books for almost 20 years, and faces as much as 105 years in prison if convicted.
Friehling surrended to authorities in Manhattan on Wednesday and was charged with one count of aiding and abetting investment adviser fraud and four counts of filing false audit reports with the Securities and Exchange Commission.
The SEC has also gotten in on the action, suing Friehling for the allegedly phony audits. The SEC says Friehling and his family members withdrew more than $5 million from accounts with Madoff over the past nine years.