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New York accounting executive who held small stake in Madoff's firm pleads guilty

Defendant Paul Konigsberg, left, and attorney Reed Brodsky leave federal court in New York on Tuesday, June 24, 2014 after he pled guilty to conspiracy and two counts of falsifying books and records in a co-operation deal with the government. The 78-year-old Konigsberg, an accounting firm executive who worked for Bernard Madoff, told the court he was not aware of Madoff's

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Defendant Paul Konigsberg, left, and attorney Reed Brodsky leave federal court in New York on Tuesday, June 24, 2014 after he pled guilty to conspiracy and two counts of falsifying books and records in a co-operation deal with the government. The 78-year-old Konigsberg, an accounting firm executive who worked for Bernard Madoff, told the court he was not aware of Madoff's "horrific and evil Ponzi scheme." Madoff is serving a 150-year prison sentence after admitting his fraud in 2009. (AP Photo/Larry Neumeister)

NEW YORK, N.Y. - A senior partner at a New York accounting firm pleaded guilty to criminal charges Tuesday in a co-operation deal with the government, saying he unwittingly played a role in financier Bernard Madoff's "horrific and evil Ponzi scheme."

The firm executive, Paul Konigsberg, pleaded guilty in federal court in Manhattan to conspiracy and two counts of falsifying books and records. He also agreed to forfeit $4.4 million in cash and property. Sentencing was set for Sept. 19, though co-operation will likely delay the date.

Prosecutors said he was the only person outside Madoff's family to have held an ownership interest in Madoff's firm before it was exposed in 2008 as a gigantic decades-old fraud. He held shares in Madoff Securities International Limited, Madoff's London-based affiliate.

Madoff, now serving a 150-year prison sentence, admitted in 2009 that his claims to have managed up to $68 billion for investors were false because he had squandered or redistributed all but a few hundred million dollars of roughly $20 billion entrusted to him. A trustee has recovered or reached agreements for recoveries to pay about $10 billion to investors.

Konigsberg, 78, told Judge Laura Taylor Swain he sometimes agreed to return investor trading statements to Madoff's firm so information about supposedly traded securities could be changed. He said he based tax returns on the information, unaware the substituted trades never happened.

"I was not aware of Madoff's horrific and evil Ponzi scheme," Konigsberg said. "I am here today to take responsibility for what I did that was wrong."

Konigsberg, of Greenwich, Connecticut, was a senior tax partner at the accounting firm Konigsberg Wolf & Co. when he did work for some of Madoff's most important clients, beginning in the early 1990s, Assistant U.S. Attorney Matthew Schwartz said.

He said Konigsberg eventually handled more than 300 of Madoff's private securities accounts, including some where Madoff executed the most glaringly fraudulent transactions.

Schwartz said Konigsberg was paid $15,000 to $25,000 monthly by Madoff Securities for over a decade and arranged a no-show job there for a relative.

Konigsberg told the judge he was in Madoff's office in 2003 with a client when Madoff's secretary, Annette Bongiorno, changed the client's trading statements for a tax year to show a gain rather than a loss, offsetting dramatic losses the client had in other investments that year. Bongiorno is awaiting sentencing after she was convicted of fraud-related charges.

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