Greenwich Executive Pleads Guilty In Madoff Fraud Scheme

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Photo Credit: File

GREENWICH, Conn. -- A 78-year-old Greenwich man faces a maximum of 30 years in prison after pleading guilty to federal charges for his role in financier Bernard Madoff's notorious financial Ponzi scheme, prosecutors said.

Paul Konigsberg, a senior partner at the New York accounting firm of Konigsberg Wolf & Co., pleaded guilty Tuesday to conspiracy and two counts of falsifying books and records in federal court in Manhattan. He also agreed to forfeit $4.4 million in cash and property. At his sentencing, set for Sept. 19, he faces a maximum of 30 years in federal prison.

Madoff steered dozens of his customers to use Konigsberg's services, and personally sought tax and business advice from him, according to Preet Bharara, U.S. attorney for the Southern District of New York.

Konigsberg pleaded guilty to falsifying the books and records of Madoff Securities and to obstructing the administration of the tax laws, Bharara said. In addition to pleading guilty, he has agreed to cooperate with the government in its ongoing investigation of the fraud at Madoff Securities, Bharara said.

According to the superseding information, the plea agreement, and other documents filed in connection with the case:

Konigsberg, a minority shareholder of Madoff Securities International Ltd., Madoff’s London-based affiliate, was the only person outside of the Madoff family to hold an ownership interest in either Madoff Securities or Madoff International.

Beginning in at least the early 1990s, Madoff began to steer several of his investors toward Konigsberg's accounting practice. By December 2008, when the scheme collapsed, Konigsberg Wolf was providing accounting services for Madoff Securities clients who held over 300 investment advisory accounts.

In addition to being paid for his accounting services by the dozens of clients referred to him by Madoff, Konigsberg also received payments directly from Madoff Securities of $15,000 to $25,000 per month for over a decade. 

Konigsberg also provided tax and business advice to Madoff personally. For example, Madoff consulted Konigsberg about establishing Madoff Securities, which had for years been a sole proprietorship, as a limited liability company. Madoff also consulted Konigsberg concerning accounting and bookkeeping issues in connection with Madoff International, the firm’s London affiliate.

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