Compliance

Accountant Serving Some Of Madoff's Wealthiest Clients Charged By SEC

Eliane Chavagnon Deputy Editor - Family Wealth Report 27 September 2013

Accountant Serving Some Of Madoff's Wealthiest Clients Charged By SEC

Paul Konigsberg, the accountant for many of Bernard Madoff’s oldest and wealthiest clients, was yesterday charged by the Securities and Exchange Commission for his role in the creation of false books and records used in the Ponzi scheme.

Konigsberg provided tax or accounting services for some 200 Bernard Madoff Investment Securities client accounts, including five of Madoff’s wealthiest and oldest clients who, combined, invested more than $1 billion in BMIS.

The SEC alleges that Konigsberg’s actions resulted in inaccurate monthly trade confirmations in addition to the development of “phony data” and records documenting the trades.

In a parallel action, the US Attorney’s Office for the Southern District of New York yesterday announced criminal charges against Konigsberg.

According to the SEC’s complaint - filed in US District Court for the Southern District of New York - Konigsberg “aided and abetted” the falsification of books and records at BMIS from at least the mid-1990s to late 2008. 

Konigsberg received fees directly from BMIS clients for the accounting services that he provided them. The SEC said that BMIS and Madoff paid Konigsberg a monthly fee of $15,000, or $20,000 as a “retainer,” for providing accounting services to a “wealthy and longtime” Madoff client and his adult children.

The SEC’s complaint seeks disgorgement of ill-gotten gains, financial penalties and permanent injunctions against Konigsberg. The investigation continues.

“Konigsberg played a vital role in Madoff’s deception of his oldest and wealthiest clients over many years,” said Andrew Calamari, director of the SEC’s New York Regional Office. “Konigsberg’s acquiescence, cooperation, and collaboration were essential to the Madoff fraud,” Calamari said.

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