Bernard Madoff's former accountant will plead guilty to charges that he manipulated trading records and conspired to help Madoff conceal his massive Ponzi scheme. Paul Konigsberg, 77, is expected to enter a guilty plea before U.S. District Judge Laura Taylor Swain next week, as disclosed by the government during a pre-trial hearing today. With the guilty plea, Konigsberg will join 14 other defendants that have previously pleaded guilty to or been convicted of charges for their role in Madoff's $65 billion Ponzi scheme.
In a five-count indictment filed by prosecutors last year, Konigsberg was indicted on two conspiracy counts and three counts of falsification of records. The indictment accused Konigsberg of serving as the primary accountant for many of Madoff's clients in order to ensure that the fictitious returns promised by Madoff were properly reflected. Prosecutors alleged Konigsberg orchestrated an intricate system to carry out Madoff's instructions, including the frequent back-dating of options trades to create the false appearances of consistent gains, the creation of "amended" monthly statements to provide to certain trusted clients, and even adding one of Konigsberg's relatives to the firm's payroll from 1992 until the firm's collapse in 2008.
Konigsberg's would be the second accountant to plead guilty to his role in Madoff's fraud. In November 2009, David Friehling pleaded guilty to nine charges, including securities fraud, investment-adviser fraud, and three counts of obstructing tax law administration. Despite pleading guilty nearly 5 years ago, Friehling has had his sentencing date continuously postponed during his extensive cooperation with the government, including testifying against five of Madoff's employees last year. Friehling could face over 100 years in prison when sentenced, and his cooperation is aimed at securing a reduced sentence.
A copy of the Konigsberg indictment is below: