In any large Ponzi scheme, even those on the fringe must face justice. Paul Konigsberg, the New York accounting firm executive who assisted Bernard Madoff in his massive Ponzi scheme, but rendered substantial assistance, in the subsequent Federal investigation, has been disbarred, thereby losing his license to practice law in the State of New York. Konigsberg, who did not receive either prison time, or any form of probation or supervision, from the District Court at sentencing, was required to forfeit $4.4m, which represented the amount he earned from his business with Madoff. His age (79) was probably a factor in the extremely lenient sentence handed down by the District Judge. Technically, he was sentenced to Time Served, but he had bonded out shortly after his arrest.
Konigsberg had previously plead guilty to:
(1) Conspiracy to falsify books & records of a broker-dealer, and of an investment adviser; and obstructing and impeding the due administration of the Internal Revenue Service.
(2) Falsifying records of a broker-dealer.
(3) Falsifying books and records of an investment adviser.
The defendant, who attempted to resign from the bar, through an application filed after his guilty plea, had his petition denied, as he was automatically disbarred, by virtue of his felony conviction. (Appellate Division Case No.; 2014-06085).