Right after the Madoff story broke, everyone wanted to know who the hell was auditing the books. The name we learned was David Friehling, a no-namer who is the son-in-law of Madoff’s personal accountant Jerome Horowitz. Since then, nobody has seen David Friehling. Perhaps he fled the country to Switzerland or maybe he’s just holed up at his compound in Rockland County.
While investigators will no doubt squeeze Friehling for every last bit of information, we suspect he’ll prove to be a dry lead, largely irrelevent to the crime.
Our guess is that Friehling had one role to play in this whole affair: Sign his name on a line so that Madoff could show he was audited by an outsider. But since the whole thing was a fraud, there was no reason for Friehling to have actually done any pretend auditing, or to have any knowledge whatsoever of Madoff’s books. If Friehling was willing to jot his name on a line (for some money and as a favour to the father-in-law), what good is it for Madoff to bring in some small-timer into the Sanctum Sanctorum of the 17th floor?
We’re pretty sure Madoff had help. The Feds are honing in on lieutenant Frank DiPascali, and both the sons and the wife will be eyed suspiciously for a while, not to mention anyone who was involved with Cohmad investments. But we doubt the guy whose job it was to lend his name to the audit report actually had any real knowledge.
Presumably, Friehling will get into trouble if in fact he lent his name to a bad audit. But that’s a much smaller crime than participating in the design and execution of a Ponzi scheme.
It’s also this reason why we think more attention will be paid to the NJ accountants Sosnik and Bell. Unlike Friehling, they actually dealt with the records that were sent to the public, and the fact that they handled hundreds of victims signifies more of a true business involvement with Madoff and his closest people.