Articles Posted in Madoff

Below is a CNBC guest blog by Ross Intelisano on the two year anniversary of Madoff’s arrest.

Madoff Two Years Later – It’ll Never Be the Same by Ross B. Intelisano – Rich & Intelisano, LLP

December 11, 2008 started like a typical year-end work day. Then the phone rang with a hysterical retired widow screaming and crying that she had just lost almost all of her money investing with Bernie Madoff. That might seem strange to many, but we receive calls like this all of the time. Our law firm represents investors who’ve been defrauded by Wall Street. But the phone kept ringing, all day, every day, from December through February. And the numbers were staggering; tens or even hundreds of millions of dollars lost. Generations of wealth were completely wiped out. We knew immediately. This was going to be the largest fraud ever, and by a long shot. And it was. $18 billion. Almost ten times larger than any other Ponzi scheme.

On June 29, 2009, Judge Denny Chin sentenced Bernard Madoff to 150 years in prison. Sitting in the courtroom that day was quite an experience. Below are my notes from that historic sentencing hearing.

Judge Chin’s sentencing of the maximum sentence drew cheers from the crowd after almost a full hour of very emotional presentations by Madoff’s victims. Judge Chin threw the book at Madoff calling it a “staggering fraud” and “not mob vengeance” as argued by Madoff’s counsel. He called the fraud a “massive breach of trust.”

One of the most amazing parts of the hearing was Judge Chin reporting that he had received not one single letter of support from family or friends of Madoff. That is astounding. I’ve never experienced a sentencing hearing in which at least one human being stood up for the character of the accused.

The Madoff Affair is a one hour special airing on Frontline on PBS on Tuesday, May 12th at 9pm. Correspondent Martin Smith and award winning producer Marcella Gaviria produced the program. Through exclusive television interviews with those closest to Madoff’s operation, they unearth the details of the world’s first global Ponzi scheme, the longest running, widest reaching business scandal in history.

Mr. Smith and Ms. Gaviria were very impressive during their interview of me. I expect the show to be the best of its kind on Madoff. It’ll be available online as well.

The accountant for Bernard Madoff was arrested and is out of jail on a $2.5 million bond. David Friehling faces up to 105 years behind bars on charges he “rubber stamped” Madoff’s books. The U.S. Attorney’s Office charged Friehling with securities fraud, aiding and abetting investment adviser fraud and four counts of filing false audit reports to the SEC.

The SEC Complaint recites some juicy facts: the Friehling family invested for many years with Madoff, up to $14 million. David Friehling tried to hide his investment by replacing his name with his wife’s name and later with “Friehling Investment Fund.” The family withdrew $5.5 million since 2000. And the Friehling firm made $186,000 per year from1991 to 2008 – that’s over $3 million in fees over 17 years. Also, the SEC Complaint alleges that Friehling lied to the AICPA that didn’t do audit work he claimed to do and lied to the SEC about Madoff’s Form X-17-A-5.

What does this mean? Criminally, it looks like the government started by arresting Friehling: the low hanging fruit. Friehling is an easy one. The big question is who’s next? Likely DiPasquale and the other Madoff Securities employees. What about family? Who knows.