Madoff Accountant Pleads Guilty To Fraud

Friehling, at a hearing before U.S. District Judge Alvin K. Hellerstein in Manhattan, pleaded guilty to securities fraud, aiding or abetting investment-adviser fraud, three counts of obstructing or impeding the administration of Internal Revenue laws, and four counts of making false filings with the U.S. Securities and Exchange Commission.

Friehling, 49 years old, admitted that he failed to conduct independent audits of Bernard L. Madoff Investment Securities LLC's financial statements, saying he took the information given to him by Madoff or Madoff's employees at "face value."

However, he denied any knowledge of Madoff's Ponzi scheme and said he entrusted his own retirement funds and his family's investments to Madoff, saying he had invested about $500,000 with the firm. Friehling said he didn't have contact with Madoff investors and didn't serve as a feeder for Madoff's business.

"In what is surely the biggest mistake of my life, I placed my trust in Bernard Madoff," Friehling said.

Friehling, who is cooperating with prosecutors, faces a statutory maximum of 114 years in prison on the charges.