World's dumbest CPA faces 150 years

Madoff CPA

[jsinger]

"Mr Friehling was paid approximately between $12,000 (£8,600) to $14,500 a month by Madoff between 2004 and 2007."

Chump change for a chump in 50 billion scam. He'll probably serve more jail time than Madoff

[news.bbc.co.uk...]

[kaled]

I'm guessing, but for him to serve serious time, I think the court would have to prove knowledge of the fraud. Incompetence and/or stupidity should not be enough. If those were crimes most politicians would die in jail.

Kaled.

[jsinger]

would have to prove knowledge of the fraud.

He doesn't have to know a thing about Madoff's fraud. (although the prosecutor thinks he knew quite a bit about it)

Apparently Friehling certified that he audited Madoff's books and they were in conformity with Generally Accepted Accounting Principles. Obviously he and his elderly partner couldn't have audited billions in transactions or confirmed the existence of the far flung assets Madoff claimed.

Even if Madoff were running an honest business, Friehling signed false certifications that he must have known would be relied on by others. That in itself is a serious crime.

This is important because CPA certifications are the foundation of our financial system

What's amazing to me is how little he got paid.

[edited by: jsinger at 9:22 pm (utc) on Mar. 18, 2009]

[Rugles]

Filing thousands of false documents can not be excused.

[kaled]

And where were the regulators during all this? I gather warnings were made several times in the last ten years, but those warnings were ignored. Regulation should involve investigation, not mere acceptance of supposed truths.

This fraud was conducted over many years and in plain sight. If I had lost money in it (and lived in the US) I would be looking to start a class action against the government for negligence. Call me cynical, but I suspect as many people as possible, will be sent to jail for as long as possible, just to convey the impression that the government is not to blame.

However, one fact that is certainly against Friehling, is that Madoff has already pleaded guilty - that means no deal can be done to give evidence.

Kaled.

[jsinger]

I didn't realize that Friehling's elderly partner died on March 12. While Friehling made modest auditing fees, this article suggests that he made a lot of money "investing" in Madoff's funds. Perhaps that's how the big money was funneled to him:

[news.moneycentral.msn.com...]

--
Madoff may be securely in jail, but his wife, sons and surely others remain major targets for investigators.

[Essex_boy]

I understand that the investigators are looking into seizing assets belonging to his wife

[Rugles]

And where were the regulators during all this?

Almost makes you suspect that there was somebody in the SEC protecting him. I have not heard anything like that in the news but I have my suspicions.