A senior partner at a New York accounting firm has pleaded not guilty to federal charges that he aided financier Bernard Madoff in his epic fraud.
Paul Konigsberg entered the plea Thursday at an arraignment on five charges that he conspired with Madoff and helped him lie to investors.
He's accused of participating in and helping to direct false bookkeeping. Prosecutors say he is the only person outside the Madoff family to have held an ownership interest in Madoff's private investment business.
Konigsberg's lawyer tells a magistrate judge that his 77-year-old client was unaware of Madoff's Ponzi scheme.
Konigsberg has been released on $2 million bail.
Madoff is serving a 150-year prison sentence after admitting his fraud in 2009.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
A senior partner at a Manhattan accounting firm was arrested Thursday on charges he participated in and helped direct false bookkeeping during Bernard Madoff's historic fraud.
Paul Konigsberg was held for an arraignment in federal court in Manhattan, where an indictment charged him with conspiracy to falsify records, conspiracy to commit fraud, falsifying records of a broker-dealer, falsifying record of an investment adviser and falsifying statements.
Konigsberg, a lawyer who was a senior tax partner at the accounting firm Konigsberg Wolf & Co., is the only person outside the Madoff family to have held an ownership interest in Madoff's private investment business, the indictment said.
It 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.
A message sent to Konigsberg's lawyer was not immediately returned.
The charges, which included a request by the government that Konigsberg be forced to forfeit all property traceable to the offenses, come just days before the start of a trial of five of Madoff's former employees. Those employees are charged with aiding him in a scheme to defraud his investors that stretched into the 1970s.