Participants in the Madoff investment scandal included employees of Bernard Madoff's investment firm with specific knowledge of the Ponzi scheme, a three-person accounting firm that assembled his reports, and a network of feeder funds that invested their clients' money with Madoff while collecting significant fees. Madoff avoided most direct financial scrutiny by accepting investments only through these feeder funds, while obtaining false auditing statements for his firm. The liquidation trustee of Madoff's firm has implicated managers of the feeder funds for ignoring signs of Madoff's deception. 
Although Madoff claimed to have executed the scheme alone, subsequent investigation has shown that he was assisted by a small group of close associates, as well as the feeders' self-interested indifference to the source of his investment returns.
Madoff Securities International Ltd..
In 2008, about $1 billion was transferred between Madoff's U.S. firm and Madoff Securities International Ltd. in London.
On March 24, 2009, Judge Louis L. Stanton granted power of attorney to Irving Picard, trustee, over Madoff's controlling stake in London.
Authorities in the U.K. are seeking evidence of money laundering involving the London business, Madoff Securities International Ltd., which opened in 1983 as a separate legal entity from Mr. Madoff's U.S. New York office. He allegedly sent more than $250 million beginning as early as 2002, from his New York-based firm, Bernard L. Madoff Investment Securities LLC, to the U.K. office and then back to accounts in the U.S.
In 2000, Madoff began to add staff and expand the operation, and loaned the business $62.5 million. He had a staff of 25, including traders, managers and support. Instructions to staff was that they communicate with Madoff Securities through personal e-mail accounts, not through company e-mail.
There were nine directors. Family members with shares included Mark and Andrew Madoff, Peter Madoff, and Bernard himself. Ruth Madoff, Bernard Madoff's wife, also held shares.
Non-family members with shares included Maurice J. "Sonny" Cohn. Madoff and Cohn were shareholders in Cohmad Securities, which steered investors to Mr. Madoff's advisory business. In 1987, Mr. Cohn had shares of Madoff Holdings Ltd., a predecessor to the current London firm. In 1998, Mr. Cohn held 35,624 non-voting shares, some of which he transferred to "BL Madoff" in 1998, and the rest that he "disposed of" in 2004.
Paul Konigsberg.
Paul Konigsberg, a New York City accountant and a longtime friend for more than 25 years, prepared two Madoff Family Foundation tax returns, and received the non-voting shares, valued at $35,000. He did work for the London office when it was first opened. A general ledger of Madoff accounts listed Konigsberg, of the reputable accounting firm of Konigsberg, Wolf &amp; Co., as receiving $30,000 a month to advise the MSIL operations, and funnel client checks to the London office for Madoff's own use.
Clients were often directed to Mr. Konigsberg by Mr. Madoff and his family. Mr. Konigsberg prepared the tax returns of foundations of six other families, many of which have lost millions, even hundreds of millions, of dollars. He also represented scores of individual Madoff investors. Mr. Konigsberg's firm has received a civil subpoena from the SEC. His Madoff-related clients included Carl and Ruth Shapiro, Boston philanthropists whose foundation lost $145 million, and whose son-in-law, Robert M. Jaffe, under investigation, is a Madoff business partner.
Konigsberg held Madoff accounts under his name including two in the name of the Westlake Foundation. Paul J. and Judith Konigsberg are officers and directors of the foundation. He owns homes in his wife, Judith's name in Greenwich, Connecticut and Palm Beach Gardens, Florida.
On April 20, 2009, Steven Leber filed a $4 million lawsuit against Konigsberg and his accounting firm for negligence, and breach of fiduciary duty. Konigsberg answered the charges with affirmative defenses.
In June 2014, Konigsberg pleaded guilty in connection to the Madoff case and would consequently face up to 30 years in prison. On July 9, 2015, U.S. District Court Judge Laura Taylor Swain agreed with prosecutors that Konigsberg did not know about Madoff's scheme and had cooperated fully with investigators. Swain ruled that Konigsberg had earned lenience from federal sentencing guidelines and did not have to serve any time in prison.
Norman F. Levy.
Evidence is being gathered by investigators on a U.S.-U.K. task force that Konigsberg and Levy, a real-estate mogul and philanthropist are believed to be involved in an international transfer of money. Levy is believed to have helped Paul Konigsberg funnel checks to London. And investigators in New York say there were billions of dollars' worth of checks going back and forth between Madoff and Levy.
Ruth and Bernie Madoff had an intimate relationship with Levy and his wife, Betty. Madoff was long known to have been Levy's "fixer", obtaining everything from choice restaurant reservations to emergency medical care. Levy had offices one floor below Madoff's in New York's Lipstick Building. It was Levy who introduced high-profile investors to Madoff.
Jeanne Levy-Church's losses forced her to shut her JEHT Foundation and her parents' foundation, the Betty and Norman F. Levy Foundation, lost $244 million. JEHT helped the less fortunate, especially ex-convicts.
Following the death of his wife, Levy's girlfriend, model Carmen Dell'Orefice, an investor, said Levy was Madoff's "father figure". When Levy died in 2005 at the age of 93, Madoff extolled him as a man whose friendship he had cherished and who had "taught me so much." Levy's son Francis said his father believed in Madoff: "If there's one honorable person," he said, "it's Bernie."
Chapter 15 bankruptcy protection.
On April 14, 2009, the liquidators of Madoff International Limited of London filed for Chapter 15 bankruptcy recognition in West Palm Beach, Florida, and sued Peter Madoff, to recover a 1964 Aston Martin DB2/4 automobile worth an estimated $200,000. In March and May 2008, Madoff International wire-transferred 135,000 pounds ($198,207) to buy a car for Peter Madoff, and delivered it to him at his residence in Palm Beach. Madoff International's listed assets are as much as $500 million and debt of more than $1 billion in its bankruptcy petition. The bankruptcy is designed to block U.S. lawsuits against foreign companies with U.S. operations while they reorganize overseas. Investors who filed an involuntary personal bankruptcy petition against Madoff want his business's U.K. unit's bankruptcy moved to New York because "overlapping discovery, related assets and common creditors" among the various cases mean they should be in the same court.
The Chapter 15 case is "In re Madoff Securities International Ltd.", 09-16751, U.S. Bankruptcy Court, Southern District of Florida (West Palm Beach).
On June 8, 2009, the Chapter 15 case was transferred to the Southern District of New York as "Madoff Securities International Limited, Stephen John Akers, Mark Richard Byers, and Andrew Laurence as the Joint Provisional Liquidators", 09-12998, so it can be administered more effectively with the related involuntary bankruptcies against Madoff, and his companies, also filed in New York. The associated adversary proceeding was also moved to the Southern District of New York as "Akers et al. v. Madoff", 09-1186, demanding $235,000 against Peter B. Madoff.
David G. Friehling.
Since at least 1991, Bernard L. Madoff Investment Securities had been audited by Friehling &amp; Horowitz CPAs, a little-known accounting firm in New City, north of New York City. The firm consisted of two principals, David G. Friehling and Jerome Horowitz, and a part-time secretary. Horowitz was semi-retired; Friehling was the sole active practitioner.
Well before the Madoff scandal broke, several observers doubted that a tiny firm with only one active accountant could competently audit a firm that had grown into a multibillion-dollar operation. In 2007, Aksia, a hedge fund consultant, warned its clients to stay away from Madoff for that very reason; its CEO, Jim Vos, likened this situation to General Motors being audited by a three-person firm. Others were suspicious that Madoff refused requests for due diligence because his accountant—supposedly his brother-in-law—was the only one allowed to see the books. Indeed, for many years, Friehling's practice was so small that he operated out of his house. He only got an office when Madoff told him that some investors were asking questions about the audits. Even then, his operation remained very small; in 2008 it only garnered $180,000 in earnings, far less than conventional wisdom would suggest for a firm that was supposedly earning substantial fees from auditing the Madoff operation. It later emerged that officials at Fairfield Greenwich Group, operator of the largest Madoff feeder fund, had been aware as early as 2005 that Friehling was the firm's sole employee.
Friehling was charged on March 18, 2009, with securities fraud, aiding and abetting investment adviser fraud, and four counts of filing false audit reports with the Securities and Exchange Commission. Friehling waived indictment and pleaded not guilty to criminal charges on July 10, 2009. He agreed to proceed without having the evidence in the criminal case against him reviewed by a grand jury at a hearing before U.S. District Judge Alvin Hellerstein in Manhattan. He faced up to 105 years in prison on all of the charges. Federal prosecutors had until about June 17, 2009, to produce a grand jury indictment against him, or a plea bargain to end the case.
Madoff's firm paid Friehling between $12,000 and $14,500 a month for his services between 2004 and 2007.
Although required, Friehling was not registered with the Public Company Accounting Oversight Board, which was created under the Sarbanes-Oxley Act of 2002 to help detect fraud. Nor was the firm "peer reviewed", in which auditors check out one another for quality control. According to the American Institute of Certified Public Accountants (AICPA), Friehling was enrolled in their peer-review program, but was not required to participate because he advised the group that he had not conducted audits for 15 years.
 It later emerged that Madoff's banker, JPMorgan Chase, had known that Friehling wasn't registered with the PCAOB or subject to peer review as early as 2006.
Friehling pleaded guilty in November 2009. He admitted to simply rubber-stamping Madoff's filings with the SEC; rather than perform actual audits, he signed blank SEC forms before Madoff and others filled them in. He also revealed that he continued to audit Madoff even though he had invested a substantial amount of money with him; accountants aren't allowed to audit broker-dealers with whom they're investing. He agreed to forfeit $3.18 million in accounting fees and withdrawals from his account with Madoff, as well as his three-story, 4,400-square-foot house in New City and one other property. Friehling faced a maximum sentence of 114 years in prison, but unlike Madoff has agreed to cooperate with the government. Calling himself a victim of Madoff, he faced a possible sentence of 20 years.
In May 2015, U.S. District Judge Laura Taylor Swain sentenced Friehling to one year of home detention and one year of supervised release. Friehling avoided prison because he cooperated extensively with federal prosecutors and because he had been unaware of the extent of Madoff's crimes. Addressing the court at the hearing, Friehling apologized to Madoff's victims. Referring to Madoff's reported statement that he was a "dumb auditor", Friehling said: "I would rather be regarded as dumb than crooked. I did not question what I should have questioned."
Swain accepted the plea terms, but suggested that Friehling be forced to pay part of the overall $130 million forfeiture arising from the fraud. Swain said that she did not believe Friehling's nonfeasance took place "in a vacuum," and felt the forfeiture was necessary to hold the defendants to account even though it will likely never be repaid in full.
Friehling's involvement made the Madoff scandal the largest accounting fraud in history, dwarfing the $11 billion fraud orchestrated by Bernard Ebbers at WorldCom.
Peter B. Madoff.
Peter B. Madoff, chief compliance officer, worked with his brother Bernie for more than 40 years, and ran the daily operations for over 20 years. Peter Madoff helped create the computerized trading system used by the firm and his daughter, Shana Madoff Swanson, worked for him at the firm as a rules and compliance officer and attorney. In 2007 she married Eric Swanson, whom she had met as he was conducting an SEC review of the firm in 2003 as an SEC assistant director.
Peter graduated from Fordham University School of Law in 1970 and was formerly director of the National Stock Exchange (Cincinnati Stock Exchange). Peter owned a home in Old Westbury, New York, valued between $3–5 million, and a $4.2 million home in Palm Beach, Florida, the title of which was transferred