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NEW CITY, N.Y. — The office in opposition to Bernard Madoff’s sole auditor exudes anything but affluence and intrigue: It is next door to a pediatrician in a drab suburban building. The tiny storefront is discreetly labeled “Friehling & Horowitz” on its glass door.

The vulgar herd milling outside are not high-end investors; they are mothers with children, waiting notwithstanding the doctor’s office to open.

But the auditor, accountant David Friehling, 49, is enmeshed in any of Wall Street’s biggest scandals and is under criminal investigation in a case that has left people in financial ruin around the world.

Authorities said Madoff has confessed to running a $50 billion Ponzi scheme. That similar a small robust was the main auditor for a multibillion-dollar operation has emerged as united of the most mysterious elements.

Experts before-mentioned it would be exorbitant for a tiny firm to properly audit an movement the bigness of Madoff’s.

“What if General Motors had a three-person accounting firm doing its audits?” said Jim Vos, CEO and head of research at the hedge-fund consulting established Aksia in New York City, 30 miles southward of New City.

Madoff, meanwhile, will not be going to jail even though he failed to meet the original provisions of his $10 million bail agreement.

Federal prosecutors said they had modified the terms of his agreement so he would not lack four the community to co-sign his bond. Madoff was incapable to meet that condition, prosecutors said. Even his sons, Andrew and Mark, apparently were unwilling to help.

Instead, Madoff has agreed to a nightly curfew, and his wife, Ruth, determination surrender her passport, according to a federal court filing Wednesday.

Madoff has already given up his passport. He fustiness remain at his Manhattan apartment from 7 p.m. to 9 a.affray.

Charities, special investors, universities, hedge funds and banks have already reported losses of more than $20 billion in the contingency. On Wednesday, Hadassah, a Jewish women’sitting bounty, became the latest group to report falling cully, saying it had abstracted $90 million.

The scope of the case makes the role of the auditor even more uncommon. Vos’ co-operator Jake Walthour said, “Most hedge funds, even when they are small, use one of four or five big-name firms. And this wasn’t one of them.”

Storefront stays locked

Calls to the firm have gone unanswered this week, and the storefront has been locked every day. On Wednesday, a cognizance of a failed UPS delivery was hung on the means of access.

Friehling’s home nearby is on a confidential road that was blocked by dint of. a security car, and in no degree one answered the phone.

Rockland County District Attorney Thomas Zugibe, who is investigating the unshaken, said he did not apprehend in which place Friehling was and had not had any contact with him.

Zugibe’s investigators were at the Friehling office Monday, knocking fruitlessly at the door.

If Friehling’s independent audit reports were fraudulent, “you’re dealing with some very serious felony offenses under state law,” Zugibe said.

The accounting firm has not been charged, and the U.S. Attorney’s Office would not strengthen whether the employment is under investigation.

Vos’ company looked into Madoff’s firm last year and warned investors off, finding several “red flags.” One was the size of Friehling’s firm.

A private searcher told Aksia there seemed to have being single person moving there. Phone calls were not returned until someone eventually answered and said the firm was not open for business, Vos said.

“We found that there were just three employees, the two principals and a secretary.”

One of the principals, Jerome Horowitz, 80, left in 1997, state records show. He lives in Florida and may subsist Friehling’session father-in-law.

This stands in sharp contrast to big auditors such as Ernst & Young, PricewaterhouseCoopers and KPMG, with the staffing to handle a immense client like Madoff.

Vos also noted Madoff had used a pre-existing licensed firm, unlike other frauds where swindlers created fictional auditing firms that issued fraudulent reports.

“It’s a real firm, that’s what’s hilarious,” he said. “Their legend is going to be that they were fooled. … It is possible.”

Asked if the accountant could possess been fooled through Madoff, the district attorney said, “Independent auditors don’privately depend on what they’re given. They’re supposed to dig into things.”

The firm seems to have a clean record. Jane Briggs of the state Education Department, which licenses certified public accountants, said there has never been any disciplinary action — and none is pending — against Friehling or the firm.

Federal authorities had a a long time conference with Madoff on Tuesday and reliance to unravel some questions in the near future, including whether he had good offices in the scheme, according to one person briefed steady the thing.

Experts attached the brokerage industry and money management have said it would be nearly impossible since Madoff to have carried out the fraud, which encompassed thousands of clients and lasted for many years, without moderately wealthy succor.

They have also questioned for what cause auditors and regulators at the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority did not notice Madoff’s rooted had to a great distance fewer possessions in 2007 than the $17 billion he claimed to be managing.

The authorities too would like to determine Madoff’s motivation for the fraud, when it began and how much of the stolen money he had spent on himself.

Mukasey recuses self

In Washington, U.S. Attorney General Michael Mukasey recused himself from the Madoff investigation because his son, Marc Mukasey, is representing Frank DiPascali, a upper side pecuniary officer at Madoff’session investment firm.

The Justice Department refused to say while Mukasey became aware of the clash excepting confirmed Wednesday he was removing himself from all aspects of the specific instance.

DiPascali was the Madoff employee who had the most day-to-day contact with the firm’session investors. Several described him as the man they reached by phone when they had questions about the firm’s investing. strategy or wanted to add or subtract money from their accounts.

SEC Inspector General David Kotz is looking into the agency’s failure to uncover the suspected fraud in Madoff’s action.

One area Kotz declared he will examine is the relationship between a former SEC attorney, Eric Swanson, and Madoff’session niece, Shana, who are now married.

Swanson was part of a team that examined Madoff’s securities brokerage operation in 1999 and 2004. Neither review resulted in any action against Madoff.

Information from The New York Times is included in this report.

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