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Madoff accountant pleads guilty

Faces maximum sentence of 108 years in prison

Last Updated: Tuesday, November 3, 2009 | 12:14 PM ET

CBC News

Disgraced financier Bernard Madoff's long-time auditor has pleaded guilty to securities fraud and other charges.

David Friehling entered the plea Tuesday in federal court in Manhattan. The charges carry a potential prison term of up to 108 years, though substantial co-operation with prosecutors can result in leniency.

Bernard Madoff's accountant, David Friehling, exits Manhattan federal court July 17 in New York.Bernard Madoff's accountant, David Friehling, exits Manhattan federal court July 17 in New York. (Louis Lanzano/Associated Press)

Friehling was Madoff's auditor from 1991 to 2008. He supposedly audited Madoff's multibillion-dollar investment advisory business from a small office with a bare-bones staff in suburban New City, N.Y., an arrangement that made a few savvy investors suspicious for years.

If Friehling had done his job, authorities say, Madoff's financial statements would have shown his company owed billions of dollars to customers and was insolvent.

He told the judge: "At no time was I ever aware Bernard Madoff was engaged in a Ponzi scheme."

Friehling pleaded guilty to revised charges that accuse him of securities fraud, investment adviser fraud, making false filings with the Securities and Exchange Commission and obstructing or impeding the administration of the Internal Revenue laws.

Madoff, 71, pleaded guilty in March to charges that his investment business was a fraud. Madoff is now serving a 150-year sentence at a prison in North Carolina.

With files from The Associated Press
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