David Friehling in federal court for the Southern District of New York as part of a plea agreement with prosecutors.
He was wearing a black suit and a stern look on his face as he stood and told the court that he wished to plead guilty, reports CBS News investigative producer Pat Milton. The guilty plea was part of a cooperation agreement with the government.
The courtroom was packed with reporters and some of Madoff's victims. Friehling didn't face the victims when he apologized to them in open court, choosing instead to direct his statements to U.S. District Judge Alvin Hellerstein.
The judge had asked if any of the victims wanted to address the court, and they declined. They also declined to speak after the hearing in which Friehling formally changed his plea from not guilty to guilty.
Friehling said he and his family lost more than $500,000 that they had invested with Madoff. As part of the plea, Friehling not only faces a prison term but the likelihood of restitution and forfeiture of any property that he may have gained from the crime.
That crime stems from what Friehling described as knowlingly and willfully engaging in a fraudulent scheme. Friehling said that he did not know about the Ponzi scheme, but he did certify as truthful Madoff's audits and financial documents as well as his personal income tax returns.
Friehling said he could not verify the information in the reports. He took them on face value, he said, and signed his name to it as a certified public accountant before mailing them to the Securities and Exchange Commission and the IRS.
Hellerstein has full discretion in determining what sentence Friehling will receive. The judge said that he will make his decision after he consults sentencing guidelines and with the U.S. Attorney's office. As part of his plea agreement, Friehling must cooperate fully with prosecutors and the FBI.
The judge scheduled a sentencing hearing for Feb. 26, 2010. Hellerstein told Friehling he could not withdraw his guilty plea if he is not satisfied with his sentence.
After Tuesday's hearing, Friehling was released on a $2.5 million bond and had to surrender his passport.