Madoff accountant arrested

CBS:

CBS News has learned that a second person was arrested today in connection with the Madoff scandal. Madoff's chief accountant David Friehling has been charged with filing false audits with and aiding and abetting security fraud.

CBS News has learned that Friehling has surrendered to authorities and is scheduled to appear before a U.S. magistrate in federal court in Manhattan later today.

Friehling was an independent accountant, and did not work at Madoff's firm. He is charged in a criminal complaint. He was allegedly the auditor that certified Madoff's annual statements with the Securities and Exchange Commission.

...
This was a pretty obvious case and it is surprising it has taken so long to bring it. Madoff clearly could not have pulled off or sustained his fraud if an honest audit was done. Auditors are supposed to look behind the balance sheet of the company to verify both assets and liabilities. Since Madoff was generating bogus trade tickets, this should have been picked up years ago. It is hard to see what defense the auditor might have more missing such a massive fraud. It will also be interesting to see how much he was paid for his "audits."

The rest of the article is about running down Madoff assets around the world. They are something under a billion.

The Hill has info on the SEC complaint against the accountants.

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