Accountant, David G. Friehling admitted in federal court that he had produced the rubber-stamp audits that allowed Mr. Madoff to conceal his enormous $65 billion Ponzi scheme from regulators for more than two decades. Federal Judge Laura Taylor Swain in Manhattan sentenced Mr. Friehling to only a year of home detention and an additional year of supervised release. This light sentence reflects Mr. Friehling’s extensive cooperation with federal prosecutors.
Mr. Friehling operated a tiny storefront office in the New York City suburb of New City. He became Mr. Madoff’s primary auditor in the early 1990s, largely inheriting the job from his father-in-law, Jerome Horowitz. The use of this tiny accounting firm was considered a red flag, given the size of Mr. Madoff’s other legitimate operations. Mr. Friehling was charged with one count of securities fraud, one count of aiding and abetting investment adviser fraud, and four counts of making false S.E.C. filings. If convicted on all six counts, Friehling could have faced up to 105 years in prison. While Mr. Friehling was not accused of knowing about Mr. Madoff’s scheme, he was charged with deceiving investors for decades by falsely certifying that he had audited Mr. Madoff’s books. Mr. Friehling was essentially charged with not having done his job, i.e. conducting proper audits.
In sentencing Mr. Friehling, Judge Swain noted he has shown considerable remorse for his actions and he had cooperated extensively with federal prosecutors, including having testified for a lengthy trial that resulted in the conviction of five former employees of Mr. Madoff’s securities’ firm. In addition, Mr. Friehling has taken steps to give back to the community. He enrolled and completed nursing school, however, unable to get a nurse’s license due to his pending criminal charges. After his son committed suicide in 2012, he has also volunteered regularly for a suicide support hotline (it is unclear whether his son’s suicide was related to the events of the Madoff Ponzi scheme). Judge Swain stated that the leniency in his sentence was appropriate, given that Mr. Friehling and his family had suffered as well due to the collapse of Mr. Madoff’s firm, losing income from employment and substantial investment savings.