Watch CBS News

Madoff Accountant Admits To Role In Infamous Ponzi Scheme

NEW YORK (CBSNewYork/AP) -- A senior partner at a New York accounting firm has now pleaded guilty to his role in the multi-billion dollar Bernard Madoff Ponzi scheme.

As WCBS 880's Irene Cornell reported, account executive Paul Konigsberg, 78, was the only person outside the Madoff family to have held an ownership interest in Madoff's private investment business.

Madoff Accountant Admits To Role In Infamous Ponzi Scheme

In his guilty plea, under a cooperation agreement with the federal government, Konigsberg admitted to becoming an unwitting participant in Madoff's massive fraud.

Konigsberg's firm – Konigsberg Wolf & Co. – had handled some 300 accounts belonging to Madoff's favorite clients. Konigsberg admitted to having trades backdated on those accounts in order to maximize profit.

He told U.S. District Judge Laura Swain he knew that returning statements to Madoff to be changed was wrong, but claimed he was not aware of Madoff's infamous Ponzi scheme.

Konigsberg was charged in an indictment last year with conspiracy to falsify records, conspiracy to commit fraud, falsifying records of a broker-dealer, falsifying record of an investment adviser and falsifying statements.

The indictment said Madoff, who is serving a 150-year prison sentence after admitting the fraud in 2009, steered some of his most important customers "in whose accounts Madoff executed the most glaringly fraudulent transactions'' to use Konigsberg as their accountant.

By the time Madoff was arrested in December 2008, Konigsberg Wolf handled accounting duties for more than 300 of Madoff's private securities accounts, court papers said.

The indictment said certain outsiders helped Madoff keep the fraud secret. It said that thousands of investors were cheated out of nearly $20 billion and that the outsiders were trusted to handle otherwise suspicious activity.

Check Out These Other Stories From

(TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.