Bernard Madoff's accountant — the only other person charged so far in the disgraced financier's massive fraud — may be nearing a plea deal.
Federal prosecutors in Manhattan notified the court on Wednesday they intend to file a document that would allow David Friehling to plead guilty in the case instead of being indicted.
Prosecutors wouldn't discuss the move. But in other cases, it has signaled that a defendant has agreed to cooperate with investigators as part of plea deal.
Friehling's attorney declined comment on Wednesday.
Friehling, 49, was charged in March with securities fraud and other counts. Since then, his attorneys and prosecutors have twice agreed to extend deadlines to indict so they could negotiate a possible plea.
Prosecutors say Friehling essentially rubber-stamped Madoff's books for 17 years, serving as Madoff's auditor from 1991 through 2008 while operating from a nondescript office in suburban New York.
Authorities said that if Friehling had done his job, Madoff's financial statements would have shown his company owed tens of billions of dollars to his customers and was insolvent.
Prosecutors alleged the relationship between the accountant and Madoff was suspiciously cozy: Friehling and his family withdrew $5.5 million from accounts with Madoff since 2000 and had a balance of more than $14 million as recently as November.
Madoff, 71, confessed to his sons in early December that his investment empire was actually a giant Ponzi scheme in which he paid off old investors with money from new ones. He was sentenced last month to 150 years in prison.