Madoff Auditor Pleads Not Guilty

Count us as surprised. After agreeing to not have the evidence against him reviewed by a grand jury, which led some (i.e. us, Bloomberg, others) to speculate that he would plead guilty, Bernie Madoff's auditor/alleged accomplice/number-maker-upper, David Friehling, plead not guilty today.

WSJ:

"[Friehling] entered a not guilty plea to securities fraud, aiding and abetting investment adviser fraud and four counts of filing false audit reports with the Securities and Exchange Commission. Mr. Friehling was originally charged in March. Assistant U.S. Attorney Lisa Baroni asked the court for the next hearing in the matter to be scheduled in 60 days to allow the parties to continue discussion of a possible disposition of the matter. The next hearing scheduled in the case is Oct. 1."

This really doesn't make a helluva lotta sense to us but whatevs. If dude is looking to roll the dice, who are we to say "you're an idiot"?

UPDATE 2:25 pm: Because it's Friday and we are intent on getting the party started early, we just so happened to ignore that the possibility of a "disposition of the matter". Our bad.

Madoff's Auditor Pleads Not Guilty [WSJ]

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Madoff "Auditor": Let's Get This Over With

Bernard Madoff’s accountant, David Friehling, accused of playing a role in the convicted money manager’s multibillion dollar fraud, agreed to waive an indictment, a signal that he may plead guilty. Federal prosecutors in New York filed a notice of intent today to file a criminal information in Manhattan federal court. The filing of such a document means Friehling has agreed that prosecutors need not present evidence against him to a grand jury.

Other suspected conspirators should probably take note.

Madoff Accountant Waives Indictment, May Plead Guilty [Bloomberg] Sphere: Related Content

Madoff Attorney: Let's Get This Thing Over With. One Year at a Time

Imprisoned fraudster Bernard Madoff has decided not to appeal against his 150-year sentence, his lawyer has said. "We are not going to be appealing," Madoff's lawyer Ira Lee Sorkin said. "That's our decision and we have no further comment."

Nothing? Like dropping suggestions for Ruth's new crib? "Ruth should really look in Brooklyn for a nice two bedroom " or "She should really wait to see if Bernie ends up in Otisville. Then she could move upstate which would be way more convenient for the conjugals."

Madoff accepts 150-year sentence [BBC] Sphere: Related Content

Madoff Attorney: I'd Do it Again

Ira Sorkin would totally stand up for the Master de Ponz all over again because he's solid like that:

"Absolutely," says Ira Sorkin, who vigorously argued for leniency on behalf of his client only to see him sentenced last week to a 150-year prison term for running a $65bn Ponzi scheme that devastated thousands of lives. "I believe in the constitution and the bill of rights and as a defence attorney I play a role in preserving the system of justice," he says.

Whoa, we got a cock-eyed idealist here! Mentioning the Constitution and the Bill of Rights. Appealing to the American ideals on 4th of July weekend...Not terribly original but still well played, counselor.

On that same nationalistic front, we would argue that Americans (particularly those that were ripped to the tune of $65 Billion) also crave vengeance, hence making Sorkin the target of "death threats and 'constant' hate mail".

So, yeah, not what we would call an easy task for any advocate. Keep fighting the good fight, I. Sork, for every Bernie Madoff, there will have to be an Ira Sorkin. Plus, the exposure's not bad either.

Madoff lawyer says he would do it all again [FT.com]

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Madoff Sentencing Happening Circa Now!

Ten victims are expected to speak at the sentencing today and the Master de Ponz is expected to speak as well.

It's been a pretty entertaining 7 months since this whole movie of the week started back in December and this will effectively be the conclusion to a story that has involved rub n' tugs, humiliated rich wives, and a request for a 12 year prison term for ripping people off for an amount somewhere between $50 and $1 gajillion.

While you're waiting for the sentence to come down, jump over to DealBreaker and guess what the Bernster's sentence will be!

UPDATE, 9:42 MDT: Sentence of 150 Years. Ouch. Bernard Madoff Sentenced to 150 Years for Epic Swindle [Bloomberg] Sphere: Related Content

Madoff's lawyer asks for 12-year prison term

From the AP:

A lawyer for Bernard Madoff has told the judge who will sentence the disgraced financier that a prison term of 12 years would be fair.

Attorney Ira Sorkin says such a sentence will not disproportionately punish his client compared to other white collar criminals.

Federal Judge Denny Chin is scheduled to sentence Mr. Madoff next Monday.

The 71-year-old Madoff pleaded guilty March 12. He admitted operating a massive Ponzi scheme. He faces up to 150 years in prison.

Dozens of Mr. Madoff's victims have already urged the judge to make sure Mr. Madoff spends the rest of his life in prison.

Mr. Madoff has been jailed since pleading guilty to 11 felony counts including securities fraud and perjury.

Complete and utter outrage to ensue in 3...2...1... Sphere: Related Content

Grant Thornton is Right in the Middle of this Whole Mess

Grant Thornton's UK office is neck deep in this whole Madoff Ponzi seized assets shitstorm drama. They're currently battling in bankruptcy court with Irving Picard, the trustee overseeing the liquidation in the U.S., to see if they can grab every nickel they can. Sounds like things were semi-cool but then this happened:

"The dispute between the two sides has escalated after GT liquidators seized a vintage Aston Martin worth $235,000 (£145,000) earlier this year which had been bought through Madoff’s UK operations."

A six figure car will get some attention regardless but we're talking about Madoff victims here. Picard is already getting sued by the victims so if he lets GT get their mitts on this little baby, there's really going to be hell to pay.

GT liquidators in US court battle for Madoff assets [AccountancyAge] Sphere: Related Content

Harry Markopolos's "I Told You So, SEC" Tour Still in Full Swing, May Have a Crush on Schapiro

In a serious case of "we heard you the first time", Harry Markopolos is still shouting from the rooftops about the SEC ignoring his warnings about Bernie Madoff's Ponzi scheme.

"'I knew it was a fraud in about five minutes', [Markopolos] said."

We get it man. You told 'em. Now go write a book and make millions so we can get on with our lives and you'll be an answer-question on Jeopardy! soon enough.

Markopolos is giving the new and improved SEC a big thumbs up though, "'[Mary Schapiro is] on fire—she has changed that agency,' Markopolos said. 'I'm really impressed.'"

Sounds like someone has a big hot crush on MSchape. Don't make it so obvious though Mark, she doesn't strike us as the type to just swoon over some whistleblower. You've got your work cut out for you.

Madoff Whistleblower Markopolos Blasts SEC [Business Week] Sphere: Related Content

Let's Talk About a Serious Topic...

...porn on work computers.

The SEC Inspector General just put out its Semiannual Report to Congress that includes the progress of the investigation into how, in God's holy name, the SEC managed to screw the pooch on this whole ponz thing with our favorite rub n' tug jailbird.

In a completely awesome coincidence, it also includes details of a senior staffer trying to access porn sites on his SEC computer:

The investigation revealed that while using his SEC computer during 17 working days, the employee received approximately 1,880 access denials for Internet websites classified by the SEC’s Internet filter as pornography.

So, at what point does a person just give up on trying to look up porn on a work computer? I mean, nearly 1,900 times? Go buy a magazine at the gas station pal.

S.E.C. Inspector Cites Progress in Madoff Inquiry [DealBook] Sphere: Related Content

It Just Keeps Getting Better for Ruth Madoff

This Vanity Fair article is being opined on anywhere, so I'll give some short highlights:

Rub and tugs. Zipping up in full view. Harassment. Hookers. Horny old man.

This is just gross.

Bernie Madoff's Secretary Spills His Secrets [Vanity Fair] Sphere: Related Content

It's Not Exactly Law & Order SVU...

Bloomberg sheds some light on two professional aspects that are thriving in this jolly good ride we call the United States economy: bankruptcy and fraud.

Lehman. Madoff. Stanford. These are just the sexy ones. Nobody hears about the measly $255 million that WexTrust Capital, LLC allegedly swiped or Sentinel Management Group allegedly using investor money to try and secure a $500 million line of credit while it was losing nearly a $1 billion.

After the poo hits the fan, trustees and receivers get to sell off all the office furniture for cents on the dollar and scramble all over the blue marble trying to find every last dollar that is stashed in a closet in Panama City.

It's nice to know that bean counters, lawyers, etc. are out there looking out for their fellow now broke-as-shit Americans.

The other thing I've noticed is that there's always a cherry on top in these situations. Examples range from the highbrow, like millions spent on priceless artwork, to thousands spent on strippers in a few hours. Really puts the swindled into an even better place.

Someone's entire life savings ended up going to a USC student that went by "Candy" in a few hours in Vegas. Great. Just great.

Bankruptcy Sleuths Find Cash in Trader Receipts for Lap Dancers [Bloomberg] Sphere: Related Content

Links 4/15/2009 - Happy Tax Day!

Yeah. Good luck with that. [Zero Hedge]

I've got believe this is grounded in some truth. Practice makes perfect! [The Onion]

I itemized for the first time every in 2008 and it was because I paid so much tax to NYS and NYC [Zero Hedge]

Bernie Madoff's auditor may have a fan. Or at least a sympathizer. [Skeptical CPA] Sphere: Related Content

They're Conspiring to Conspire

It comes as no surprise today that Bernie Madoff's auditor is facing charges of securities and investment advisor fraud.

Today's New York Times states the obvious when talking about the "red flags":

Some of Mr. Madoff’s critics have said that the tiny accounting firm was a red flag, given the size of Mr. Madoff’s legitimate operations. The fact that Mr. Friehling also appeared to be the agent for dozens of accounts with Mr. Madoff’s investment advisory firm, according to a list of customers assembled by the trustee overseeing the firm’s bankruptcy, should have raised more red flags, they said.

Look, I know that many people that invested w/ the Bernster aren't even remotely intelligent about financial matters but c'mon... BILLIONS of dollars audited by Friehling and Horowitz?

It seems reasonable to me that there are some complicit BM (ha!) investors out there that saw that this thing was now what it seemed and said nothing. Or I could be wildly speculating...I'm sure the crack-squad at the SEC will get to the bottom of it. To be continued....

Madoff’s Accountant Is Charged With Securities Fraud [New York Times] Sphere: Related Content

Not Too Big 4 to Fail?

Being unemployed allows me to do lots of reading and thinking. One isn't so dangerous, the other has the potential. Accordingly, I'm going to do some wildly unfounded speculating.

I was speaking to a friend/colleague last Friday whose client is currently being sued for activity related to that guy who Madoff with all the money (I think I owe Paul Provenza for that pun) and wondered what is the end result of all this madness...Is the possibility of a Final Big 4 (FB4) firm failure out there?

My friend's client is certainly not the first (who knows who is) and definitely won't be the last. This clustercluck stretches far and wide. The obvious thought is, who will get to Madoff first? The Russian mob or the Latin American drug cartels? It could be prominent Jews or his own lawyer!

Regardless of what happens to the Master Ponz is somewhat irrelevant. What comes to my mind is that the FB4 could have serious litigation problems on their hands.

When you consider the crooked legitimate clients of the FB4 and their exposure to the funds of Bernard L. Madoff Investment Securities either through feeder funds or direct investments this could end up being one hell of a domino effect.

The parties that lost money (can be searched here) are not pushovers. This will not be taken lightly.

Discuss. Sphere: Related Content