Last modified on 17 April 2015, at 05:03

David G. Friehling

David G. Friehling
Born (1959-11-27) November 27, 1959 (age 55)
Sullivan County, New York
Occupation Accountant
Criminal charge
securities fraud, aiding and abetting investment adviser fraud, filing false audit reports with the Securities and Exchange Commission
Conviction(s) November 3, 2009 (pleaded guilty)

David G. Friehling (born November 27, 1959)[1] is an American accountant who was arrested and charged in March 2009 for his role in the Madoff investment scandal.[2] He later pled guilty to these charges. His role in covering up Madoff's massive Ponzi scheme makes it the largest accounting fraud in history.

Early lifeEdit

Friehling was born in Sullivan County, north of New York City, and attended high school in Liberty, New York. His family owned the Stevensville Hotel, at Borscht Belt resort in Swan Lake, New York.[3] He is a 1981 graduate of Cornell University, and a past-president of the Rockland chapter of the NYS Society of CPAs (NYSSCPA).

Friehling & Horowitz as Madoff's auditorsEdit

From 1991–2008, Friehling & Horowitz, a little-known accounting firm in New City, New York, a small hamlet in the Rockland County suburbs north of New York City, signed off on audits on Bernard L. Madoff Investment Securities LLC's books. Friehling falsely represented to investors and the Securities and Exchange Commission that he and the firm had conducted audits, and the Madoff firm was financially sound. In the meantime, Friehling and his family withdrew millions of dollars from accounts at the Madoff firm, over $5.5 million since 2000.[4] Friehling's actions made the Madoff scandal not only the largest Ponzi scheme in history, but the largest accounting fraud in history.

The firm consisted of two principals—Friehling and Jerome Horowitz—and a secretary. Horowitz met Madoff in 1963, when the Madoff organization was a penny stock trader. He audited Madoff's books before retiring to Palm Beach Gardens, Florida in 1991 and handing the account to his son-in-law, Friehling. Horowitz died on March 12, 2009 after a long battle with cancer; it is not known whether he was a target of the Madoff investigation.[5][6]

Well before the Madoff scandal broke, several observers doubted that a tiny firm with only one active accountant could competently service a firm that had grown into a multi-billion-dollar operation. In 2007, Aksia LLC, a hedge fund consultant, warned its clients to stay away from Madoff for that very reason; its CEO, Jim Vos, likened this situation to General Motors being audited by a three-person firm.[7] Others were suspicious that Madoff refused requests for due diligence because his accountant—supposedly his brother-in-law—was the only one allowed to see the books.[8]

Soon after the Madoff scandal broke, it emerged that Friehling & Horowitz had informed the American Institute of Certified Public Accountants in writing since 1993 that it didn't conduct audits.[9] An investigation into Friehling by Rockland County district attorney Thomas Zugibe was stopped in deferral to the investigation by the United States Attorney for the Southern District of New York.[10]

Friehling was not registered with the Public Company Accounting Oversight Board, which was created under the Sarbanes-Oxley Act of 2002 to help detect fraud. Nor was the firm "peer reviewed," in which auditors check one another for quality control. According to the AICPA, Friehling was enrolled in their peer-review program, but was not required to participate because he supposedly didn't conduct audits.[9][11] It later emerged that Madoff's banker, JPMorgan Chase, had known that Friehling wasn't registered with the PCAOB or subject to peer review as early as 2006.[12]

Arrest and pleaEdit

Friehling was charged on March 18, 2009, with securities fraud, aiding and abetting investment adviser fraud, and four counts of filing false audit reports with the Securities and Exchange Commission.[13]

On July 10, 2009, Friehling waived indictment and pleaded not guilty to criminal charges. He agreed to proceed without having the evidence in the criminal case against him reviewed by a grand jury at a hearing before U.S. District Judge Alvin Hellerstein in Manhattan.

On November 3, 2009, he pled guilty to the charges against him. He admitted to simply rubber-stamping Madoff's filings with the SEC. He also revealed that he continued to audit Madoff even though he had invested a substantial amount of money with him. Accountants aren't allowed to audit broker-dealers with whom they're investing. He agreed to forfeit $3.18 million in accounting fees and withdrawals from his account with Madoff, as well as his three-story, 4,400 foot house in New City and one other property. Friehling faces a maximum sentence of 108 years in prison, but unlike Madoff has agreed to cooperate with the government.[5][14] The guilty plea effectively ended his career as an accountant; the SEC is not allowed to accept audits from convicted felons. He lost his CPA license on July 19, 2010.[15]

Friehling's sentencing was originally set for February 2010, but has been postponed several times at prosecutors' request due to his cooperation with the government's effort to unwind Madoff's crimes. Initially rescheduled to September 3, 2010 (at the request of the prosecution, citing Friehling's "continuing cooperation with the Government"),[16] it has been repeatedly postponed. In March 2012 it was postponed to October 26, 2012.[17] In July 2014, it was postponed to December 5, 2014.[14] In late 2014, it was postponed again, this time to July 10, 2015.[18]

SEC chargesEdit

The SEC brought civil charges against Friehling and his firm.[19] Madoff's firm paid Friehling between $12,000 and $14,500 a month for his services between 2004 and 2007.[20]


On November 15, 2012, Friehling’s 23-year-old son Jeremy Friehling, a medical school student, shot himself in his apartment in Ohio. Faculty advisers at Ohio State University, where he was a medical student, had become concerned after he wrote suicidal posts on Facebook.[21]

Current StatusEdit

David Friehling is currently a car salesman at Rockland Nissan in Blauvelt, New York. [22]

See alsoEdit


  1. ^ "Free Birthday Database". November 27, 1959. Retrieved February 22, 2013. 
  2. ^ Chung, Joanna (March 22, 2009). "Madoff investigation is far form over". Financial Times. Retrieved March 22, 2009. 
  3. ^ Steve Israel (March 22, 2009). "Madoff mess has local link". Retrieved February 22, 2013. 
  4. ^
  5. ^ a b Hamblett, Mark. Madoff's Accountant Acknowledges Guilt, Casts Himself as Victim. New York Law Journal, November 4, 2009.
  6. ^ Arrested Madoff accountant had Palm Beach Gardens partner. Palm Beach Post, March 4, 2009.
  7. ^ Fitzgerald, Jim. Madoff's financial empire audited by tiny firm: one guy. Associated Press via Seattle Times, December 18, 2008.
  8. ^ Markopolos, Harry (March 2010). No One Would Listen: A True Financial Thriller. Hoboken, New Jersey: John Wiley & Sons. ISBN 978-0-470-55373-2. 
  9. ^ a b Abkowitz, Alyssa (December 17, 2008). "Madoff's auditor... doesn't audit?". CNN. Retrieved March 22, 2009. 
  10. ^ Voreacos, David (December 16, 2008). "New York Prosecutor Drops Madoff Auditor Probe; Defers to U.S.". Bloomberg News. Retrieved December 24, 2008. 
  11. ^ Dugan, Ianthe Jeanne; Crawford, David (February 18, 2009). "Accounting Firms That Missed Fraud at Madoff May Be Liable". The Wall Street Journal. Retrieved March 22, 2009. 
  12. ^ "Madoff trustee suit against JPMorgan Chase" (PDF). The Wall Street Journal. Retrieved February 22, 2013. 
  13. ^ Bray, Chad (July 18, 2009). "Madoff Ex-Auditor Friehling Enters a Plea of Not Guilty". The Wall Street Journal. 
  14. ^ a b Lieberman, Steve. Sentencing of Madoff's New City auditor put off again. The Journal News, 2014-07-04.
  15. ^ Pavlo, Walter (September 16, 2011). "David Friehling, Madoff's Accountant, Sentencing Postponed....Again". Forbes. 
  16. ^ United States v. David Friehling – Court’s Order Adjourning Sentencing to Sept. 3, 2010, United States v. David G. Friehling, The United States Department of Justice, retrieved July 25, 2010
  17. ^ Pavlo, Walter (April 18, 2012). "Before Prison – Future Inmates Get in Their Vacation". Forbes. Retrieved February 22, 2013. 
  18. ^ Lieberman, Steve. Friehling remains free, testifying in Madoff Ponzi scam. The Journal News, 2014-12-15.
  19. ^ "Press Release: SEC Charges Madoff Auditors With Fraud; 2009–60; March 18, 2009". March 18, 2009. Retrieved February 22, 2013. 
  20. ^ Efrati, Amir (March 19, 2009). "Accountant Arrested for Sham Audits". The Wall Street Journal. 
  21. ^ "Bernie Madoff accountant's son shoots himself dead in Ohio department". New York Daily News. Retrieved November 17, 2012. 
  22. ^ "Rockland Nissan Employee Directory". Rockland Nissan. Retrieved January 13, 2015.