UPDATE 1-Former accountant for Madoff is arrested
Sept 26 (Reuters) - A former accountant for Bernard Madoff was arrested on Thursday, nearly five years after the imprisoned swindler's huge Ponzi scheme was uncovered, an FBI spokesman said.
Paul Konigsberg, the accountant and former senior tax partner at Konigsberg Wolf & Co in New York, is the 15th individual to be charged over the fraud, centered at the now-defunct Bernard L. Madoff Investment Securities LLC in New York.
Madoff, 75, was arrested on Dec. 12, 2008 and is serving a 150-year prison term. The trustee liquidating his firm has said customers lost about $17.3 billion of principal.
Konigsberg's arrest comes less than two weeks before the expected trial of five former Madoff employees accused of aiding the fraud.
According to court papers, Konigsberg was a close associate of Madoff in a relationship dating at least to the 1980s. He helped Madoff open a London-based operation, Madoff Securities International Ltd, in which he owned nonvoting shares.
It was not immediately clear what charges Konigsberg faces.
In March 2009, U.S. prosecutors accused Madoff of using the London operation to launder money.
They said he would wire money from his New York investment advisory business to London, and then from London back to New York to support his trading business and to personally benefit himself, family and associates, court papers show.
Reed Brodsky, a lawyer for Konigsberg, did not immediately respond to requests for comment.
Brodsky told The New York Times, which earlier reported the arrest, that his 77-year-old client was an "innocent victim" of Madoff's fraud who looked forward to clearing his name at trial.
A spokeswoman for U.S. Attorney Preet Bharara in New York declined to comment.
Thursday's arrest comes less than three months before a five-year statute of limitations runs out for prosecutors to bring securities fraud charges tied to the fraud.
Nine people have pleaded guilty. They include Madoff, his brother Peter Madoff, former top lieutenant Frank DiPascali - who has been closely cooperating with the investigation, and another former accountant, David Friehling.
The five former employees, who pleaded not guilty and face an Oct. 7 trial in the federal court in New York, are Annette Bongiorno, Daniel Bonventre, Joann Crupi, Jerome O'Hara and George Perez.