• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia
FinanceMadoff

Ex-Madoff employees avoid prison

By
Reuters
Down Arrow Button Icon
By
Reuters
Down Arrow Button Icon
May 28, 2015, 4:57 PM ET
Bernard L. Madoff leaves US Federal Cour
Bernard L. Madoff leaves US Federal Court after a hearing regarding his bail on January 14, 2009 in New York. Madoff will remain free on bail, a US judge ruled Wednesday, rejecting a bid by prosecutors to detain Madoff pending trial. AFP PHOTO / TIMOTHY A. CLARY (Photo credit should read TIMOTHY A. CLARY/AFP/Getty Images)Photograph by Timothy A. Clary — AFP/Getty Images

(Reuters) – A former outside auditor and a former human resources employee of Bernard Madoff’s firm avoided prison on Thursday, after cooperating with authorities investigating the now-imprisoned swindler’s multibillion-dollar Ponzi scheme.

The auditor, David Friehling, was sentenced by U.S. District Judge Laura Taylor Swain in New York to a year of home confinement, and to pay his share of a symbolic $130 billion joint forfeiture with other defendants.

“I will regret for the rest of my life the role I played in this devastating crime,” Friehling, 55, said in court.

Swain also sentenced the former human resources employee Craig Kugel, 41, to time served, and ordered that he forfeit $2.3 million.

Both men were among the 15 people to be convicted at trial or to plead guilty in connection with the investigation of Bernard L. Madoff Investment Securities following the collapse of Madoff’s Ponzi scheme in 2008.

Madoff is serving a 150-year prison term for orchestrating a fraud that cost investors an estimated $17 billion in principal losses.

Friehling and Kugel testified at the trial of five other former Madoff employees, all of whom were convicted in 2014 and sentenced to prison terms ranging from 2-1/2 to 10 years.

Prosecutors said Friehling, who pleaded guilty in 2009 to charges including securities fraud, never conducted a meaningful review of the firm’s finances but instead rubber-stamped information presented to him by Madoff employees.

Friehling also certified to the U.S. Securities and Exchange Commission that he used standard accounting practices to audit the firm, prosecutors said.

Though Friehling’s actions helped Madoff conceal his fraud, Friehling said he did not know of the Ponzi scheme.

Friehling also served as Madoff’s personal accountant and prepared fraudulent tax returns for Madoff, his brother Peter, and his sons Mark and Andrew, prosecutors said.

Kugel pleaded guilty in 2009 to tax fraud and making false statements.

His father, David, was a longtime trader at Madoff’s firm who also pleaded guilty and was sentenced to 10 months of home confinement on Wednesday.

Craig Kugel also said he was unaware of the Ponzi scheme, but prosecutors said he committed other crimes at the firm.

Specifically, authorities said Kugel enrolled non-employee relatives of workers in the firm’s healthcare plan, and used a company credit card for personal expenses while employed at an affiliate of Madoff’s firm.

For more about Madoff’s fraud, watch this Fortune video:

About the Author
By Reuters
See full bioRight Arrow Button Icon

Latest in Finance

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • Future 50
  • World’s Most Admired Companies
  • See All Rankings
Sections
  • Finance
  • Leadership
  • Success
  • Tech
  • Asia
  • Europe
  • Environment
  • Fortune Crypto
  • Health
  • Retail
  • Lifestyle
  • Politics
  • Newsletters
  • Magazine
  • Features
  • Commentary
  • Mpw
  • CEO Initiative
  • Conferences
  • Personal Finance
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
About Us
  • About Us
  • Editorial Calendar
  • Press Center
  • Work At Fortune
  • Diversity And Inclusion
  • Terms And Conditions
  • Site Map

© 2025 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.


Latest in Finance

EconomyTariffs and trade
Even if the Supreme Court rules Trump’s global tariffs are illegal, refunds are unlikely because that would be ‘very complicated,’ Hassett says
By Jason MaDecember 21, 2025
5 hours ago
EnergyAlternative energy
Solar power and battery storage are booming despite Trump policy whiplash as clean energy meets soaring data center demand
By Jennifer McDermott and The Associated PressDecember 21, 2025
6 hours ago
PoliticsOil
U.S. pursues another tanker skirting Venezuela sanctions as GOP senator calls seizures a ‘provocation and a prelude to war’
By Aamer Madhani and The Associated PressDecember 21, 2025
6 hours ago
sustainability
CommentarySustainability
2025: the year sustainability didn’t die 
By Andrew WinstonDecember 21, 2025
14 hours ago
Young banker
SuccessCareers
Is AI really killing finance and banking jobs? Experts say Wall Street’s layoffs may be more hype than takeover—for now
By Emma BurleighDecember 21, 2025
16 hours ago
J&J
LawCancer
Johnson & Johnson hit with another giant asbestos-talcum powder verdict: $65.5 million in Minnesota
By The Associated PressDecember 21, 2025
17 hours ago

Most Popular

placeholder alt text
Future of Work
Meet a 55-year-old automotive technician in Arkansas who didn’t care if his kids went to college: ‘There are options’
By Muskaan ArshadDecember 21, 2025
18 hours ago
placeholder alt text
Future of Work
A Walmart employee nearly doubled her pay after entering its pipeline for skilled tradespeople. 'I was able to move out of my parents' house'
By Anne D'Innocenzio and The Associated PressDecember 20, 2025
1 day ago
placeholder alt text
Success
Multimillionaire musician Will.i.am says work-life balance is for people 'working on someone else’s dream'—he grinds from 5-to-9 after his 9-to-5
By Orianna Rosa RoyleDecember 21, 2025
12 hours ago
placeholder alt text
Economy
For the first time since Trump’s tariff rollout, import tax revenue has fallen, threatening his lofty plans to slash the $38 trillion national debt
By Sasha RogelbergDecember 12, 2025
9 days ago
placeholder alt text
Success
The scientist who helped create AI says it’s only ‘a matter of time’ before every single job is wiped out—even safer trade jobs like plumbing
By Orianna Rosa RoyleDecember 19, 2025
3 days ago
placeholder alt text
Future of Work
'They'll lose their humanity': Dartmouth professor says he's surprised just how scared his Gen Z students are of AI
By Nick LichtenbergDecember 20, 2025
2 days ago