Accountant Who Helped Madoff Cover Up Scam Avoids Prison

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An accountant who helped Bernard Madoff fudge trading records to cover up fraudulent transactions in the biggest Ponzi scheme in U.S. history won’t be going to prison.

Paul Konigsberg, 79, told U.S. District Judge Laura Taylor Swain Thursday that he didn’t know that Madoff, whom he called “a monster,” was stealing client money and running what turned out to be a $17.5 billion scam. Konigsberg is the fifth person tied to Madoff to avoid prison this year after cooperating with prosecutors.

“I want you to know that I accept full responsibility for my actions,” Konigsberg told Swain, occasionally breaking down during a statement to the court.

Swain, calling Konigsberg “an outsider” who had no knowledge of Madoff’s scheme, also cited his advanced age and “extensive philanthropy and personal generosity” in sentencing him to no jail time.

A handful of defendants tied to Madoff remain to be sentenced, including Irwin Lipkin, who admitted in 2012 to falsifying books and records for Madoff. His sentencing was delayed because he has been ill.

Prosecutors asked the judge to show leniency to Konigsberg for his cooperation. The former accountant faced as long as 30 years in prison and more than $5.5 million in penalties. In a plea deal last year, he agreed to forfeit $4.4 million, $4.1 million of which he’s already paid to the trustee liquidating Madoff’s former firm.

Swain didn’t impose any additional fines or restitution.

20 Clients

Konigsberg said he represented about 20 Madoff clients and admitted taking phony statements from Madoff, which were used in filing income tax returns for clients.

Konigsberg’s acquiescence helped Madoff deliver on promises to clients that they would receive a specific rate of return, according to prosecutors. Konigsberg also admitted allowing Madoff to give a member of his family a no-show job at the con man’s firm.

Dozens of family and friends who filled Swain’s courtroom embraced him after the hearing.

“I’m just relieved it’s over,” a smiling Konigsberg said outside the courtroom.

Konigsberg pleaded guilty in June 2014 to charges of conspiracy, falsifying records of a broker-dealer and fabricating records of an investment adviser.

Reed Brodsky, Konigsberg’s lawyer, wiped away tears during his client’s statement to Swain.

“It was very emotional for me,” said Brodsky, a former assistant U.S. attorney who successfully prosecuted Raj Rajaratnam and Rajat Gupta on insider-trading charges. “He’s just a very understanding, generous and compassionate person.”

The case is U.S. v. Konigsberg, 10-cr-00228, U.S. District Court, Southern District of New York (Manhattan).

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