Accountant Shenanigans: Laurence M. Brown and Ronald Mangini

Although, there are not many complimentary things to be said about Bernie Madoff , perhaps his most positive contribution to the investment community has been to increase awareness about ponzi schemes and other investment scams.  Consequently, there has been increased scrutiny of investment companies by the SEC and other financial regulatory bodies, and ensuing prosecution of fraudulent activities. One such fraud relates to two Certified Public Accountants (CPAs), who were charged, on July 22, 2010 with running a ponzi scheme.

Laurence M. Brown and Ronald Mangini, both CPAs from Westchester County N.Y. who run their own accounting firm, Marshall Granger & Co, were charged with selling investments in  what they claimed to be a profitable gas pipeline company in Tennessee, but was atually an inoperative company and had been so for more than a decade.  Some of the more interesting details of the case are as follows:

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Accountant Shenanigans: David G. Friehling (Madoff Accountant)

Bernie Madoff accountant, David G. Friehling, was finally stripped of his license after being accused of falsely representing that the financial statement for Bernie Madoff Investment Securities, LLC (BMIS) were audited in accordance with Generally Accepted Auditing Standards (GAAS) and conformed to GAAP. 

Some of the more egregious GAAP and GAAS irregularities included:

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