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 Paul Konigsberg, 79, a lawyer and accounting firm executive, pleaded
guilty in June 2014 to charges of conspiracy and falsifying books
and records.
At the time, his cooperation deal was seen as a signal that
prosecutors were still pursuing a criminal case against Madoff's
son, Andrew, who died of cancer three months later.
U.S. District Judge Laura Taylor Swain in New York, citing an
otherwise admirable life, said Konigsberg had been punished enough
by the loss of his reputation.
“You’ve demonstrated sincere remorse,” she said.
Prosecutors said Konigsberg was unaware of the scheme but helped by
conspiring with Madoff employees to create some of the fraudulent
customer statements at its heart.
“Not a day goes by that I don’t regret that I trusted Mr. Madoff,” a
tearful Konigsberg told Swain. “As we’ve all come to know, this man
was truly a monster.”
Konigsberg’s plea last year included references to two unnamed
co-conspirators who allegedly received sham tax-free loans from
Madoff. Sources told Reuters the two people were Madoff’s sons, Mark
and Andrew.
Mark Madoff committed suicide in December 2010 on the second
anniversary of his father’s arrest. Andrew Madoff died in September.
The Madoff brothers denied any knowledge of or involvement in their
father’s fraud. Bernard Madoff is serving a 150-year sentence after
pleading guilty to running the Ponzi scheme, estimated to have cost
investors $17 billion in principal.
In the 1990s, Madoff began steering some of his biggest clients to
Konigsberg’s accounting firm.
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In several instances, Konigsberg agreed to return customer account
statements to Madoff's firm, to be replaced by amended statements
with fraudulent backdated trades. He then filed clients' tax returns
based on the revised statements.
Konigsberg also allowed Madoff to pay a relative for a no-show job
at Madoff’s firm, prosecutors said.
Konigsberg has forfeited more than $4 million of commissions his
firm received for Madoff clients.
Prosecutors said Konigsberg aided the investigation into Madoff's
longtime bank, JPMorgan Chase & Co. The bank agreed in January 2014
to pay $2.6 billion to resolve criminal and civil claims related to
Madoff.
Fifteen defendants including Madoff have been convicted in
connection with the fraud.
The case is U.S. v. Konigsberg, U.S. District Court for the Southern
District of New York, No. 10-cr-228.
(Reporting by Joseph Ax)
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