U.S. authorities have charged a longtime accountant for many of the oldest and wealthiest clients of legendary fraudster, Bernard Madoff, for his role in helping create the false books and records used in Madoff’s massive Ponzi scheme.

The U.S. Securities and Exchange Commission (SEC) filed a complaint filed in U.S. District Court for the Southern District of New York, and in a parallel action, the U.S. attorney’s office announced criminal charges against, Paul Konigsberg, a lawyer and certified public accountant, who was the senior tax partner of Konigsberg Wolf & Co., P.C. alleging that he aided in the falsification of books and records at Bernard L. Madoff Investment Securities LLC (BMIS). The allegations have not been proven.

The SEC alleges that Konigsberg aided the falsification of books and records at BMIS from at least the mid-1990s to late 2008. It says that he provided tax or accounting services for more than 200 BMIS client accounts, including five of Madoff’s wealthiest and oldest clients who invested more than a billion dollars combined in the firm. And, it notes he received fees directly from the clients for the accounting services, but that Madoff also paid him a monthly fee of $15,000 or $20,000 as a ‘retainer’ for providing accounting services to a wealthy and longtime Madoff client and his adult children.

The SEC charges that Konigsberg coordinated with BMIS staff to: decide upon desired investment or tax gains and losses to be manufactured and reported in client account statements and in BMIS computer systems; consult about backdated trades and fictitious account activity entered into the computer systems to create the desired trading results; and, to design fictitious account activity to be entered into the firm’s books and records and reflected on new phony account statements.

Konigsberg, 77, was arrested in New York. He is charged in two counts of conspiracy, one count of falsifying the books and records of a broker-dealer, one count of falsifying the books and records of an investment advisor, and one count of making false statements in a document. The U.S. attorney’s office says that he faces a maximum sentence of 40 years in prison, and that he is also subject to mandatory restitution and criminal forfeiture, and faces criminal fines up to twice the gross gain derived from the offense. The SEC’s complaint seeks disgorgement of ill-gotten gains, financial penalties, and permanent injunctions against Konigsberg.

“Konigsberg played a vital role in Madoff’s deception of his oldest and wealthiest clients over many years,” said Andrew Calamari, director of the SEC’s New York Regional Office. “Konigsberg’s acquiescence, cooperation, and collaboration were essential to the Madoff fraud.”