LawFuel.com – Attorney Releases
PREET BHARARA, the United States Attorney for the
Southern District of New York, JOSEPH M. DEMAREST, JR., the
Assistant Director-in-Charge of the New York Field Division of
the Federal Bureau of Investigation (“FBI”), and PATRICIA J.
HAYNES, the Special Agent-in-Charge of the New York Field Office
of the Internal Revenue Service (“IRS”), announced today that
DAVID G. FRIEHLING, the accountant for Bernard L. Madoff
Investment Securities, LLC (“BLMIS”), pleaded guilty in Manhattan
federal court before United States District Judge ALVIN K.
HELLERSTEIN. FRIEHLING pleaded guilty to a nine-count
Superseding Information charging him with securities fraud,
investment adviser fraud, four counts of filing false audit
reports with the United States Securities and Exchange Commission
(“SEC”), and three counts of obstructing or impeding the
administration of the internal revenue laws. In addition to
pleading guilty, FRIEHLING has agreed to cooperate with the
Government in its ongoing investigation of Bernard Madoff’s
fraud.
FRIEHLING, 49, faces a statutory maximum sentence of
114 years in prison. He is also subject to mandatory restitution
and faces criminal fines up to twice the gross gain or loss
derived from the offense. Moreover, pursuant to the cooperation
agreement entered into with the Government, FRIEHLING has agreed
to forfeit to the United States $3,183,000 (the “Forfeiture Money
Judgement”), representing the total amount of compensation he
received from BLMIS for his accounting and tax services, plus the
amount that he, his wife, and his children withdrew from their
BLMIS investment advisory accounts. FRIEHLING also agreed to
forfeit his interest in certain real properties, to the extent
that those properties constitute, or were derived from, the
securities fraud charge to which he pleaded guilty. The
forfeited real properties will be used to partially satisfy the
Forfeiture Money Judgement. The statutory maximum sentences for
each of the charged offenses are set forth in the attached chart
below.
Following the guilty plea, Judge HELLERSTEIN released
FRIEHLING on a $2.5 million bond on the condition that the bond
be co-signed by eight financially responsible individuals and
secured by equity in five properties owned by the co-signers
valued between $1 million and $1.2 million. In addition,
FRIEHLING’s travel is restricted to the Southern District and the
Eastern District of New York. He is required to maintain land
line telephone service and will continue to be subject to regular
pretrial supervision. FRIEHLING’s wife was required to surrender
her passport. (FRIEHLING had surrendered his passport at the
time of his arrest.)
Judge HELLERSTEIN set a sentencing control date for
FRIEHLING on February 26, 2010, 2010, at 11:00 a.m.
United States Attorney PREET BHARARA said, “David
Friehling was one of the key enablers of Bernard Madoff’s
historic fraud. With his guilty plea, Friehling has taken
responsiblity for his crimes and will now assist us in holding
others accountable for their involvement in Madoff’s epic fraud
against so many victims.”
Mr. BHARARA praised the investigative work of the FBI
and the IRS. Mr. BHARARA also thanked the Securities and
Exchange Commission for its assistance.
Assistant United States Attorneys MARC LITT, LISA A.
BARONI, WILLIAM J. STELLMACH, BARBARA A. WARD, and SHARON FRASE
are in charge of the prosecution.
09-356 ###
STATUTORY MAXIMUM PENALTIES
United States v. David G. Friehling (09 Cr. 700)
Count Charge Maximum Penalties
ONE Securities Fraud 20 years in prison; 3 years
supervised release; fine of
the greatest of $5,000,000 or
twice the gross gain or loss;
mandatory $100 special
assessment; restitution
TWO Investment Adviser Fraud 5 years in prison 3 years
supervised release; fine of
the greatest of $10,000 or
twice the gross gain or loss;
mandatory $100 special
assessment; restitution
THREE
FOUR
FIVE
SIX
Making False Filings with
the Securities and Exchange
Commission
20 years in prison; 3 years
supervised release; fine of
the greatest of $5,000,000 or
twice the gross gain or loss;
mandatory $100 special
assessment; restitution
SEVEN Obstructing or Impeding the
Administration of the
Internal Revenue Laws 1991-
1997
3 years in prison; 1 year
supervised release; fine of
the greatest of $250,000 or
twice the gross gain or loss;
mandatory $100 special
assessment; restitution; costs
of prosecution
EIGHT Obstructing or Impeding the
Administration of the
Internal Revenue Laws 1998-
2003
3 years in prison; 1 year
supervised release; fine of
the greatest of $250,000 or
twice the gross gain or loss;
mandatory $100 special
assessment; restitution; costs
of prosecution
NINE Obstructing or Impeding the
Administration of the
Internal Revenue Laws 2004-
2008
3 years in prison; 1 year
supervised release; fine of
the greatest of $250,000 or
twice the gross gain or loss;
mandatory $100 special
assessment; restitution; costs
of prosecution
