At 11th hour, 15th person charged in Madoff affair
NEW YORK — Nearly five years after the fraud was uncovered, a former accountant for Bernard Madoff has been indicted on charges he helped the swindler defraud thousands of customers in the Ponzi scheme Madoff masterminded.
The indictment of the 15th person charged in the scandal comes less than three months before a fiveyear statute of limitations runs out for prosecutors to bring securities fraud charges tied to Madoff’s scheme.
Paul Konigsberg, the former accountant and a former senior tax partner at Konigsberg Wolf in New York, was arrested Thursday and charged with two conspiracy charges and three charges of falsifying records and statements.
The charges were announced 11 days before the start of a trial of five former Madoff employees also accused of aiding the fraud. The cases center on the now- defunct Bernard L. Madoff Investment Securities in New York. Madoff, 75, is serving a 150- year prison term.
Konigsberg, 77, pleaded not guilty in a brief appearance before a U. S. magistrate judge in Manhattan. He was freed on $ 2 million bond with restricted travel. Konigsberg, a Greenwich, Conn., resident, could face up to 40 years.
Reed Brodsky, a lawyer for Konigsberg, said his client was also a victim of Madoff’s fraud, with Konigsberg’s family having lost $ 10 million. “For a number of months, we’ve tried to demonstrate to the federal authorities that Mr. Konigsberg has committed no crime,” Brodsky said outside the courthouse after the hearing. “He is a victim of a sociopath — BernieMadoff.”
According to the indictment, Madoff directed more than 300 accounts to Konigsberg, who along with top Madoff lieutenant Frank DiPascali manipulated trades to make customers appear to be getting the steady investment returns they had been promised.
Konigsberg was also accused of concealing the fraud by helping Madoff arrange for customers to receive “amended” account statements that contained false trading activity.
In one such instance, Madoff in 2008 supposedly backdated losing trades to recoup $ 1.6 million from a customer, and allegedly arranged to have Konigsberg, who had received duplicate account statements, return them so they could be amended.
One Madoff employee supposedly noted: “Corrected statements. Keep in hanging folder. Do not mail out! We never received his original statement back ( from the client). He told Bernie he sends everything to Paul & Paul told Bernie he shreds whatever he doesn’t need!”
Konigsberg was also accused of arranging a job with Madoff for a relative who collected more than $ 320,000 without having to showup forwork.
Of the people charged for crimes related to Madoff’s Ponzi scheme, nine have pleaded guilty so far.