Paul Konigsberg, Bernie Madoff's longtime accountant and close friend, was arrested in New York Thursday and charged with fraud in a five-count criminal indictment.
Konigsberg worked with at least 300 of convicted Ponzi schemer Madoff's clients, helping to conceal the vast conspiracy, according to the indictment by the U.S. Attorney for the Southern District. Among the charges, the Justice Department alleges Konigsberg falsified records of a broker dealer and an investment advisory firm. The DOJ also accused Konigsberg of committing fraud relating to federal standards on how pensions are managed.
In a parallel civil investigation, the Securities and Exchange Commission on Thursday also charged Konigsberg with fraud for allegedly creating false records used by Madoff to perpetuate the scam.
“Konigsberg played a vital role in Madoff’s deception of his oldest and wealthiest clients over many years,” Andrew M. Calamari, director of the SEC’s New York Regional Office, said in a statement. “Konigsberg’s acquiescence, cooperation, and collaboration were essential to the Madoff fraud.”
Reed Brodsky, Konigsberg's attorney, pushed back against the allegations, saying Konigsberg was "an innocent victim of Bernie Madoff," adding that "he looks forward to clearing his good name at trial."
Konigsberg was a close personal friend of Madoff for more than 25 years. The New York City accountant was also the only non-family shareholder in Madoff's London operation. His attorney told The Wall Street Journal in 2009 that he had no "meaningful business role" there. However, Madoff often referred associates to Konigsberg for tax preparation services, and there have been suspicions among prosecutors that he was privy to Madoff's fraud.
Madoff was convicted of crafting a multi-billion-dollar Ponzi scheme in which many victims lost all of their savings. He was sentenced to 150 years in prison in 2009.