Madoff auditor pleads not guilty, but talking dea

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Madoff auditor pleads not guilty, but talking deal

By DAVID B. CARUSO
Associated Press Writer

Louis Lanzano
Bernard Madoff's accountant David Friehling exits Manhattan federal court, Friday, July 17, 2009, in New York. Prosecutors say Friehling, who has pleaded not guilty to securities fraud, rubber-stamped Madoff's books for 17 years without confirming their accuracy.


A federal judge has granted prosecutors more time to negotiate a possible plea bargain with Bernard Madoff's longtime auditor.

Accountant David Friehling pleaded not guilty Friday to charges including securities fraud and filing false reports with the Securities and Exchange Commission.

Prosecutors said Friehling rubber-stamped Madoff's books for 17 years without confirming their accuracy. He is the only person besides Madoff facing criminal charges so far in the case.

Friehling also waived his right Friday to have a grand jury consider his case, a step often taken in cases where a plea bargain is likely. He had been charged previously, but had not yet entered a formal plea.

The accountant and his attorney, Andrew Lankler, declined to answer questions following the brief hearing at the U.S. District Court in Manhattan.

His next scheduled court appearance is in October, a date set after assistant U.S. Attorney Lisa Baroni asked for more time to discuss a "possible disposition" to the case with the defense.

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.

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

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