Madoff accountant pleads guilty

Bill San Antonio

A lawyer who served as a personal tax and business advisor to Bernard Madoff pleaded guilty on Tuesday to three counts of falsifying records of the convicted fraudster’s clients who he later represented when the federal government began investigating Madoff’s firm, prosecutors said.

Paul Konigsberg, 78, a senior partner at Konigsberg Wolf & Co., P.C., faces up to 30 years in prison and has agreed to contribute $4.4 million to the Madoff Victim Fund, which to date has collected $4 billion in restitution for Madoff’s former clients, prosecutors said.

Konigsberg also agreed as part of his plea agreement before Judge Laura Taylor Swain in Manhattan federal court to cooperate with the government’s ongoing investigation of Madoff Securities, prosecutors said.

Prosecutors said Madoff, a former Roslyn resident, urged investors he had defrauded in the early 1990s to retain Koingsberg’s services. Madoff later also sought the services of Koingsberg, who also served as an accountant and held a minority share of Madoff Securities.

Konigsberg and Madoff’s working relationship enabled Madoff to replace the financial statements of his clients with those that reflected different holdings and values, which prosecutors said Konigsberg continued to use in dealing with clients.

By December 2008, when Madoff’s scheme fell apart, prosecutors said Konigsberg Wolf represented clients who held over 300 investment advisory accounts with Madoff Securities.

Konigsberg also represented Madoff personally and was paid between $15,000 to $25,000 for his services each month for more than a decade, prosecutors said. He later arranged for one of Konigsberg’s relatives to be paid a salary with benefits from Madoff Securities despite not working for the company.

Prosecutors had also found that Konigsberg was consulted by Madoff about avoiding tax liability after transferring the funds of two Madoff employees.

Konigsberg told Madoff no taxes would be due as long as the transfers were structured as loans and the loans’ interest and principal were paid. He later arranged for promissory notes to be written documenting the terms and provided the financial terms of the deal to make it appear to conform with tax laws. 

Konigsberg is tentatively scheduled to be sentenced on Sept. 19 at 2 p.m.

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